[House Report 106-943]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     106-943

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



 
                 WET WEATHER WATER QUALITY ACT OF 2000

                                _______
                                

October 6, 2000.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Shuster, from the Committee on Transportation and Infrastructure, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 828]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Transportation and Infrastructure, to whom 
was referred the bill (H.R. 828) to amend the Federal Water 
Pollution Control Act to require that discharges from combined 
storm and sanitary sewers conform to the Combined Sewer 
Overflow Control Policy of the Environmental Protection Agency, 
and for other purposes, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.
  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Wet Weather Water Quality Act of 
2000''.

SEC. 2. COMBINED SEWER OVERFLOWS.

  Section 402 of the Federal Water Pollution Control Act (33 U.S.C. 
1342) is amended by adding at the end the following:
  ``(q) Combined Sewer Overflows.--
          ``(1) Requirement for permits, orders, and decrees.--Each 
        permit, order, or decree issued pursuant to this Act after the 
        date of enactment of this subsection for a discharge from a 
        municipal combined storm and sanitary sewer shall conform to 
        the Combined Sewer Overflow Control Policy signed by the 
        Administrator on April 11, 1994 (in this subsection referred to 
        as the `CSO control policy'), and shall provide for the 
        development and implementation of long-term control plans to 
        meet applicable water quality standards as expeditiously as 
        possible.
          ``(2) Water quality and designated use review guidance.--Not 
        later than December 31, 2000, and after providing notice and 
        opportunity for public comment, the Administrator shall issue 
        guidance to facilitate the conduct of water quality and 
        designated use reviews for municipal combined sewer overflow 
        receiving waters.
          ``(3) Report.--Not later than September 1, 2001, the 
        Administrator shall transmit to Congress a report on the 
        progress made by the Environmental Protection Agency, States, 
        and municipalities in implementing and enforcing the CSO 
        control policy.''.

SEC. 3. WET WEATHER PILOT PROGRAM.

  Title I of the Federal Water Pollution Control Act (33 U.S.C. 1251 et 
seq.) is amended by adding at the end the following:

``SEC. 121. WET WEATHER WATERSHED PILOT PROJECTS.

  ``(a) In General.--The Administrator, in coordination with the 
States, may provide technical assistance and grants for treatment works 
to carry out pilot projects relating to the following areas of wet 
weather discharge control:
          ``(1) Watershed management of wet weather discharges.--The 
        management of municipal combined sewer overflows, sanitary 
        sewer overflows, and stormwater discharges, on an integrated 
        watershed or subwatershed basis for the purpose of 
        demonstrating the effectiveness of a unified wet weather 
        approach.
          ``(2) Stormwater best management practices.--The control of 
        pollutants from municipal separate storm sewer systems for the 
        purpose of demonstrating and determining controls that are 
        cost-effective and that use innovative technologies in reducing 
        such pollutants from stormwater discharges.
  ``(b) Administration.--The Administrator, in coordination with the 
States, shall provide municipalities participating in a pilot project 
under this section the ability to engage in innovative practices, 
including the ability to unify separate wet weather control efforts 
under a single permit.
  ``(c) Funding.--
          ``(1) In general.--There is authorized to be appropriated to 
        carry out this section $10,000,000 for fiscal year 2002, 
        $15,000,000 for fiscal year 2003, and $20,000,000 for fiscal 
        year 2004. Such funds shall remain available until expended.
          ``(2) Stormwater.--The Administrator shall make available not 
        less than 20 percent of amounts appropriated for a fiscal year 
        pursuant to this subsection to carry out the purposes of 
        subsection (a)(2).
          ``(3) Administrative expenses.--The Administrator may retain 
        not to exceed 4 percent of any amounts appropriated for a 
        fiscal year pursuant to this subsection for the reasonable and 
        necessary costs of administering this section.
  ``(d) Report to Congress.--Not later than 5 years after the date of 
enactment of this section, the Administrator shall transmit to Congress 
a report on the results of the pilot projects conducted under this 
section and their possible application nationwide.''.

SEC. 4. SEWER OVERFLOW CONTROL GRANTS.

  Title II of the Federal Water Pollution Control Act (33 U.S.C. 1342 
et seq.) is amended by adding at the end the following:

``SEC. 220. SEWER OVERFLOW CONTROL GRANTS.

  ``(a) In General.--In any fiscal year in which the Administrator has 
available for obligation at least $1,200,000,000 for the purposes of 
section 601--
          ``(1) the Administrator may make grants to States for the 
        purpose of providing grants to a municipality or municipal 
        entity for planning, design, and construction of treatment 
        works to intercept, transport, control, or treat municipal 
        combined sewer overflows and sanitary sewer overflows; and
          ``(2) subject to subsection (g), the Administrator may make a 
        direct grant to a municipality or municipal entity for the 
        purposes described in paragraph (1).
  ``(b) Prioritization.--In selecting from among municipalities 
applying for grants under subsection (a), a State or the Administrator 
shall give priority to an applicant that--
          ``(1) is a municipality that is a financially distressed 
        community under subsection (c);
          ``(2) has implemented or is complying with an implementation 
        schedule for the 9 minimum controls specified in the CSO 
        control policy referred to in section 402(q)(1) and has begun 
        implementing a long-term municipal combined sewer overflow 
        control plan or a separate sanitary sewer overflow control 
        plan; or
          ``(3) is requesting a grant for a project that is on a 
        State's intended use plan pursuant to section 606(c).
  ``(c) Financially Distressed Community.--
          ``(1) Definition.--In subsection (b), the term `financially 
        distressed community' means a community that meets 
        affordability criteria established by the State in which the 
        community is located, if such criteria are developed after 
        public review and comment.
          ``(2) Consideration of impact on water and sewer rates.--In 
        determining if a community is a distressed community for the 
        purposes of subsection (b), the State shall consider, among 
        other factors, the extent to which the rate of growth of a 
        community's tax base has been historically slow such that 
        implementing a plan described in subsection (b)(2) would result 
        in a significant increase in any water or sewer rate charged by 
        the community's publicly owned wastewater treatment facility.
          ``(3) Information to assist states.--The Administrator may 
        publish information to assist States in establishing 
        affordability criteria under paragraph (1).
  ``(d) Cost Sharing.--The Federal share of the cost of activities 
carried out using amounts from a grant made under subsection (a) shall 
be not less than 55 percent of the cost. The non-Federal share of the 
cost may include, in any amount, public and private funds and in-kind 
services, and may include, notwithstanding section 603(h), financial 
assistance, including loans, from a State water pollution control 
revolving fund.
  ``(e) Administrative Reporting Requirements.--If a project receives 
grant assistance under subsection (a) and loan assistance from a State 
water pollution control revolving fund and the loan assistance is for 
15 percent or more of the cost of the project, the project may be 
administered in accordance with State water pollution control revolving 
fund administrative reporting requirements for the purposes of 
streamlining such requirements.
  ``(f) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $750,000,000 for each of fiscal 
years 2002 and 2003. Such sums shall remain available until expended.
  ``(g) Allocation of Funds.--
          ``(1) Fiscal year 2002.--Subject to subsection (h), the 
        Administrator shall use the amounts appropriated to carry out 
        this section for fiscal year 2002 for making grants to 
        municipalities and municipal entities under subsection (a)(2), 
        in accordance with the criteria set forth in subsection (b).
          ``(2) Fiscal year 2003.--Subject to subsection (h), the 
        Administrator shall use the amounts appropriated to carry out 
        this section for fiscal year 2003 as follows:
                  ``(A) Not to exceed $250,000,000 for making grants to 
                municipalities and municipal entities under subsection 
                (a)(2), in accordance with the criteria set forth in 
                subsection (b).
                  ``(B) All remaining amounts for making grants to 
                States under subsection (a)(1), in accordance with a 
                formula to be established by the Administrator, after 
                providing notice and an opportunity for public comment, 
                that allocates to each State a proportional share of 
                such amounts based on the total needs of the State for 
                municipal combined sewer overflow controls and sanitary 
                sewer overflow controls identified in the most recent 
                survey conducted pursuant to section 516(b)(1).
  ``(h) Administrative Expenses.--Of the amounts appropriated to carry 
out this section for each fiscal year--
          ``(1) the Administrator may retain an amount not to exceed 1 
        percent for the reasonable and necessary costs of administering 
        this section; and
          ``(2) the Administrator, or a State, may retain an amount not 
        to exceed 4 percent of any grant made to a municipality or 
        municipal entity under subsection (a), for the reasonable and 
        necessary costs of administering the grant.
  ``(i) Reports.--Not later than December 31, 2003, and periodically 
thereafter, the Administrator shall transmit to Congress a report 
containing recommended funding levels for grants under this section. 
The recommended funding levels shall be sufficient to ensure the 
continued expeditious implementation of municipal combined sewer 
overflow and sanitary sewer overflow controls nationwide.''.

SEC. 5. INFORMATION ON CSOS AND SSOS.

  (a) Report to Congress.--Not later than 3 years after the date of 
enactment of this Act, the Administrator of the Environmental 
Protection Agency shall transmit to Congress a report summarizing--
          (1) the extent of the human health and environmental impacts 
        caused by municipal combined sewer overflows and sanitary sewer 
        overflows, including the location of discharges causing such 
        impacts, the volume of pollutants discharged, and the 
        constituents discharged;
          (2) the resources spent by municipalities to address these 
        impacts; and
          (3) an evaluation of the technologies used by municipalities 
        to address these impacts.
  (b) Technology Clearinghouse.--After transmitting a report under 
subsection (a), the Administrator shall maintain a clearinghouse of 
cost-effective and efficient technologies for addressing human health 
and environmental impacts due to municipal combined sewer overflows and 
sanitary sewer overflows.

                          Purpose and Summary

    The purpose of H.R. 828, as amended, is to prevent and 
reduce water quality problems caused by wet weather flows 
throughout the U.S. by taking various actions, including 
authorizing grants to municipalities and to states for combined 
sewer overflow (CSO) and sanitary sewer overflow (SSO) 
projects, authorizing grants for a wet weather pilot program, 
and codifying the Environmental Protection Agency's (EPA) 
existing CSO Control Policy.

                  Background and Need for Legislation


Overview

    Our national wastewater infrastructure is aging and its 
capacity has not kept pace with economic and population growth, 
leading to increased sewer system overflows. Combined sewer 
systems, which carry both storm water and sanitary (municipal 
and industrial) flows, and separate sanitary sewer systems 
often overflow with untreated (or partially treated) waste 
during wet weather episodes, like rain or snow melts. CSOs and 
SSOs may also occur during dry weather periods due to poor 
maintenance, deteriorating infrastructure, or infiltration and 
inflow, among other factors.
    Over 1,100 communities across the U.S. have combined sewer 
systems. The combined sewer systems are remnants of the 
country's early wastewater infrastructure, constructed before 
wastewater treatment standards and requirements were 
established. These systems were constructed with approximately 
15,000 relief outlets designed to prevent flows in excess of 
system capacity from damaging the treatment plant, by allowing 
discharges (``overflows'') to occur before the water reaches 
the plant. CSOs typically occur in nearby streams, rivers, 
lakes or estuaries, and are among the major sources responsible 
for beach closures, shell fish restrictions and exceedances in 
water quality standards.
    Separate sanitary sewer systems, on the other hand, are not 
designed to carry stormwater flows, therefore, generally do not 
have built-in relief outlets like combined sewer systems. 
Although these systems are intended to carry all the sewage 
that flows into them to a treatment works, EPA has estimated 
that more than 40,000 SSOs a year occur from the nation's 
19,500 sanitary sewer systems often as a result of undersized 
or deteriorating systems, or failures within the system. SSOs 
can occur in parks, streets, and basements, among other areas.
    CSOs and SSOs present significant public health and safety 
concerns because they often occur in areas of potential human 
exposure, and result in exceedances of water quality standards 
negatively impacting the environment.

Combined sewer overflows

    CSOs are point source discharges under the Clean Water Act, 
subject to permitting under the National Pollutant Discharge 
Elimination System (NPDES) by EPA or authorized states. Given 
that causes of CSOs are typically site-specific, permits 
usually include technology-based standards determined on a 
case-by-case basis (rather than categorical standards) and 
appropriate water quality standards.
    Over the years concerns have been raised over whether NPDES 
requirements have been applied consistently across the U.S. 
regarding the control of CSOs. In order to achieve national 
consistency and clarity, EPA issued a CSO Control Policy in 
April 1994. The CSO Control Policy provides guidance to states 
and municipalities on the minimum necessary controls to develop 
appropriate, site-specific permits to address the unique nature 
of CSOs, and provides municipalities with flexible solutions 
for controlling CSOs by taking into consideration not only the 
CSO's environmental impacts, but how long it will take and how 
much it will cost to develop and implement appropriate 
controls.
    The CSO Control Policy requires immediate implementation of 
nine minimum controls, such as proper system operation and 
maintenance and pollution prevention, followed by 
implementation of a long-term control plan so that 
municipalities will come into compliance with Clean Water Act 
requirements and water quality standards can be achieved.

Sanitary sewer overflows

    Similar to CSOs, SSOs are also point source discharges 
under the Clean Water Act, and generally are considered to be 
unauthorized, unpermitted discharges in violation of the Clean 
Water Act. However, some permits have authorized SSOs under 
limited circumstances (e.g. if they occur through ``peak excess 
flow treatment facilties,'' analogous to the CSO built-in 
relief outlets). Questions about the regulatory treatment of 
SSOs remain, such as whether separate sanitary sewer systems 
should be permitted to allow such discharges, and what level of 
treatment should be required. EPA has not issued formal 
guidance for addressing the control of SSOs, although the 
Agency is currently working on proposed regulations to provide 
clarification and consistency on this issue.

Estimated costs to control CSOs and SSOs

    Recent EPA and industry analyses have revealed that a 
significant investment in the nation's wastewater 
infrastructure is needed to achieve water quality standards. 
The Water Infrastructure Network's April 2000 report, ``Clean 
and Safe Water for the 21st Century'', and EPA's recent draft 
``Needs Gap'' study estimate more than $300 billion over the 
next 20 years in wastewater infrastructure needs, and that 
there is an enormous gap between such needs and current 
federal, state, and local spending trends.
    While the EPA ``Needs Gap'' study is not yet final, it 
currently estimates $45 billion will be needed over the next 20 
years to control CSOs, and $80 to $90 billion will be needed to 
control SSOs. (These estimates do not include operations and 
maintenance or all sewer system replacement costs, which 
typically are a local responsibility.)
    Congress, EPA, states, municipalities and other 
stakeholders agree that both nationally consistent regulatory 
treatment and additional funding are needed for controlling 
CSOs and SSOs. This bill codifies the CSO Control Policy to 
help ensure its implementation and consistent application, and 
provides an initial modest authorization of funding needed to 
control wet weather flows until a more comprehensive, long-term 
approach can be developed and implemented.

      Discussion of Committee Bill and Section-by-Section Analysis


Section 1. Short title

    This section provides that the Act may be cited as the 
``Wet Weather Quality Act of 2000.''

Section 2. Combined sewer overflows

    This section amends section 402 of the Clean Water Act by 
adding a new subsection (q) entitled ``Combined Sewer 
Overflows'' that codifies EPA's CSO Control Policy. 
Specifically, it requires that each permit, order, or decree 
related to CSOs issued after enactment of this Act pursuant to 
the Clean Water Act, at a minimum, conform to the CSO Control 
Policy and provide for the development and implementation of 
long-term control plans to meet water quality standards as 
expeditiously as possible.
    This section also requires the EPA Administrator to issue 
guidance by December 31, 2000 to assist states in conducting 
water quality and designated use reviews for CSO receiving 
waters. Finally, EPA is required to report to Congress by 
September 1, 2001 on progress made in implementing and 
enforcing the CSO Control Policy.

Section 3. Wet Weather Pilot Program

    This section creates a new Clean Water Act section 121 
entitled ``Wet Weather Watershed Pilot Projects.'' Under the 
new section 121, the EPA Administrator is authorized, in 
coordination with states, to provide technical assistance and 
grants for wet weather watershed pilot projects. The technical 
assistance and grants are to be used for projects involving 
treatment works (as defined in Clean Water Act section 212) 
that control CSO, SSO and stormwater discharges on an 
integrated, watershed or subwatershed basis to demonstrate the 
effectiveness of a unified wet weather approach.
    Regarding controlling pollutants from municipal separate 
stormwater systems, this section emphasizes the use of pilot 
projects to demonstrate controls that are cost-effective and 
that use innovative technologies. The Committee is aware of one 
particular new technology that involves ``stormwater inserts.'' 
These so-called ``smart sponges'' have been utilized in 
Springfield, Massachusetts and other locations to trap debris 
and soak up hydrocarbons and other contaminants. The pollutants 
are then encapsulated in fiber that can be burned as a fuel 
source. The Committee intends that stormwater controls funded 
under this new section should be demonstrated in different 
locations and under different situations, and the results of 
those tests should be made available to communities around the 
country.
    In order to facilitate the development of wet weather 
watershed pilot projects, this section states that the EPA 
Administrator, in coordination with the states, shall provide 
municipalities the ability to engage in innovative practices, 
including the ability to unify separate wet weather control 
efforts under a single permit. The EPA Administrator should 
afford municipalities the maximum flexibility possible within 
existing statutory and regulatory authorities to engage in the 
innovative practices envisioned under this provision.
    To carry out the pilot projects, $10 million, $15 million 
and $20 million are authorized for fiscal years 2002, 2003 and 
2004, respectively. The EPA Administrator is directed to set 
aside at least 20 percent of annual appropriated amounts for 
pilot projects related to stormwater controls, and may retain 
up to 4 percent of annual appropriated amounts for 
administering this section.
    Finally, the EPA Administrator is directed to report to 
Congress not later than five years after the date of enactment 
of this Act on the results of the wet weather watershed pilot 
projects and their possible application nationwide.

Section 4. Sewer overflow control grants

    If at least $1.2 billion per year is available for 
obligation for the Clean Water State Revolving Loan Fund (Clean 
Water SRF) program, this section authorizes the EPA 
Administrator to make grants to states for the purpose of 
providing grants to a municipality or to make a direct grant to 
a municipality for the planning, design, and construction of 
treatment works to intercept, transport, control, or treat CSOs 
and SSOs.
    When EPA or the states are selecting among municipalities 
applying for these grants, EPA or the state shall give priority 
to municipalities that: are financially distressed communities; 
have implemented or are complying with the implementation of 
the nine minimum controls of the CSO Control Policy, and have 
begun implementing a long-term CSO or SSO control plan; or, are 
requesting a grant for a project that is on a state's intended 
use plan that states develop to identify priority projects to 
receive Clean Water SRF assistance pursuant to Clean Water Act 
section 606(c).
    State-established affordability criteria determine whether 
or not a community is ``financially distressed,'' if such 
criteria are developed after public review and comment. States 
are to consider, among other factors, if the rate of growth of 
a community's tax base has been historically slow such that 
implementing any CSO or SSO long-term control plans would 
significantly increase water or sewer rates. The EPA 
Administrator is authorized to publish information to assist 
states in developing the affordability criteria.
    The Federal cost-share of projects under this section is 
not less than 55 percent. The non-federal cost-share may 
include public and private funds and in-kind services in any 
amount. To help ensure the grant program authorized under this 
Act is coordinated with the Clean Water SRF program, this 
section: authorizes municipalities to use Clean Water SRF 
assistance as the non-federal match; and, if a project receives 
Clean Water SRF assistance that is more than 15 percent of the 
cost of the project, the applicant may apply Clean Water SRF 
administrative reporting requirements to the entire project for 
the purpose of streamlining such requirements.
    This section authorizes $750 million for each of fiscal 
years 2002 and 2003 for sewer overflow control assistance. For 
fiscal year 2002, all amounts authorized to be appropriated are 
for grants to municipalities. For fiscal year 2003, the EPA 
Administrator is authorized to award not more than $250 million 
to municipalities, and to award all remaining amounts to states 
to award to municipalities.
    To allocate the grants to states in fiscal year 2003, EPA 
is directed to develop a formula, with an opportunity for 
public review and comment, that calculates the proportional 
share of available amounts to each state based on the total 
state CSO and SSO needs identified in the most recent Clean 
Water Needs survey conducted pursuant to Clean Water Act 
section 516(b)(1).
    The EPA Administrator is authorized to use up to 1 percent 
of appropriated amounts for administering the overall grant 
program, and the EPA Administrator or a state, may use up to 4 
percent of any grant to a municipality for administering such 
grant.
    The EPA Administrator is required to transmit a report to 
Congress by December 31, 2003, and periodically thereafter, 
recommending funding levels sufficient to continue implementing 
CSO and SSO controls nationwide.

Section 5. Information on CSOs and SSOs

    This section requires the EPA Administrator to transmit a 
report to Congress no later than three years after enactment of 
this Act, summarizing: the extent of human health and 
environmental impacts caused by CSOs and SSOs, including the 
location of discharges causing the impacts, the volume of 
pollutants and the constituents discharged; how much 
municipalities have spent to address such impacts; and, an 
evaluation of the technologies municipalities used to address 
these impacts.
    After transmitting this report to Congress, the EPA 
Administrator is required to maintain a technology 
clearinghouse on cost-effective and efficient technologies for 
addressing the human health and environmental impacts from CSOs 
and SSOs.

                                Hearings

    On June 22, 1999, the Water Resources and Environment 
Subcommittee held a hearing on clean water infrastructure and 
wet weather flows legislation, including H.R. 828, the 
``Combined Sewer Overflow Control and Partnership Act of 
1999,'' and a draft of H.R. 3570, ``The Urban Wet Weather 
Priorities Act of 1999.'' The Subcommittee heard testimony from 
EPA, state and local officials, and representatives of 
environmental, and water and sewer infrastructure groups.

                        Committee Consideration

    On September 27, 2000, the Committee on Transportation and 
Infrastructure met in open session, discharged H.R. 828 from 
the Subcommittee on Water Resources and Environment, and 
ordered the bill reported, as amended, to the House by voice 
vote.
    The Committee adopted an amendment in the nature of a 
substitute that, in general, combines portions of H.R. 828 and 
H.R. 3570, and specifically: authorizes $1.5 billion total for 
fiscal years 2002 and 2003 for grants to municipalities and to 
states for CSO and SSO projects; authorizes $45 million total 
for fiscal years 2002 through 2004 for grants for a wet weather 
pilot program to demonstrate the effectiveness of a unified 
approach to wet weather flows and the application of stormwater 
best management practices; and, requires reports to Congress on 
CSO and SSO related matters, and the maintenance of a 
technology clearinghouse on controlling CSOs and SSOs.

                             Rollcall Votes

    Clause 3(b) of rule XIII of the House of Representatives 
requires each committee report to include the total number of 
votes cast for and against on each rollcall vote on a motion to 
report and on any amendment offered to the measure or matter, 
and the names of those members voting for and against. There 
were no recorded votes taken in connection with ordering H.R. 
828 reported.

                      Committee Oversight Findings

    With respect to the requirements of clause 3(c)(1) of rule 
XIII of the Rules of the House of Representatives, the 
Committee's oversight findings and recommendations are 
reflected in this report.

                          Cost of Legislation

    Clause 3(d)(2) of rule XIII of the Rules of the House of 
Representatives does not apply where a cost estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974 has been timely submitted prior to the filing of the 
report and is included in the report. Such a cost estimate is 
included in this report.

                    Compliance With House Rule XIII

    1. With respect to the requirement of clause 3(c)(2) of 
rule XIII of the Rules of the House of Representatives, and 
308(a) of the Congressional Budget Act of 1974, the Committee 
references the report of the Congressional Budget Office 
included below.
    2. With respect to the requirement of clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, the 
Committee has received no report of oversight findings and 
recommendations from the Committee on Government Reform on the 
subject of H.R. 828.
    3. With respect to the requirement of clause 3(c)(3) of 
rule XIII of the Rules of the House of Representatives and 
section 402 of the Congressional Budget Act of 1974, the 
Committee has received the following cost estimate for H.R. 828 
from the Director of the Congressional Budget Office.

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, October 5, 2000.
Hon. Bud Shuster,
Chairman, Committee on Transportation and Infrastructure,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 828, the Wet 
Weather Water Quality Act of 2000.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susanne S. 
Mehlman.
            Sincerely,
                                           Steven Lieberman
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 828--Wet Weather Water Quality Act of 2000

    Summary: CBO estimates that implementing this legislation 
would cost about $1 billion over the next five years, assuming 
appropriation of the necessary amounts. The bill would not 
affect direct spending or receipts; therefore, pay-as-you-go 
procedures would not apply. H.R. 828 contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.
    H.R. 828 would authorize the appropriation of $45 million 
over the 2002-2004 period for the Environmental Protection 
Agency (EPA) to provide new grants to states to conduct pilot 
projects related to the control of stormwater and improved 
sewer management practices. The bill also would authorize the 
appropriation of $1.5 billion over the 2002-2003 period for new 
grants to states and municipalities to address sewer overflow 
problems. In addition, this legislation would require EPA to 
report to the Congress on local government resource needs to 
improve sewer management practices, and to maintain a 
clearinghouse for technologies used to control sewer management 
problems. We estimate that these activities would cost about $1 
million in 2003, subject to the availability of appropriated 
funds. In subsequent years, the cost of maintaining the 
clearinghouse would be less than $500,000 a year.
    Estimated cost to the Federal Government: For this 
estimate, CBO assumes that the amounts authorized will be 
appropriated for each fiscal year and that outlays will occur 
at rates similar to those of other grant programs to control 
water pollution. The estimated budgetary impact of H.R. 828 is 
shown in the following table. The costs of this legislation 
fall within budget function 300 (natural resources and 
environment).

----------------------------------------------------------------------------------------------------------------
                                                                    By fiscal year, in millions of dollars--
                                                               -------------------------------------------------
                                                                  2001      2002      2003       204      2005
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level.................................         0       760       766        20         0
Estimated Outlay..............................................         0        40       153       345       460
----------------------------------------------------------------------------------------------------------------

    Pay-as-you-go considerations: None.
    Intergovernmental and private-sector imact: H.R. 828 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments. Enacting sections 3 and 4 would benefit 
state and local governments by authorizing the Environmental 
Protection Agency to make grants for projects to control 
stormwater discharges and sewer overflows.
    Estimate prepared by: Federal Costs: Susanne S. Mehlman. 
Impact on State, Local, and Tribal Governments: Victoria Heid 
Hall. Impact on the Private Sector: Tim VandenBerg.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                   Constitutional Authority Statement

    Pursuant to clause (3)(d)(1) of rule XIII of the Rules of 
the House of Representatives, committee reports on a bill or 
joint resolution of a public character shall include a 
statement citing the specific powers granted to the Congress in 
the Constitution to enact the measure. The Committee on 
Transportation and Infrastructure finds that Congress has the 
authority to enact this measure pursuant to its powers granted 
under article I, section 8 of the Constitution.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act. (Public Law 104-4.)

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                Applicability to the Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act. (Public Law 
104-1.)

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

                  FEDERAL WATER POLLUTION CONTROL ACT

                 TITLE I--RESEARCH AND RELATED PROGRAMS

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SEC. 121. WET WEATHER WATERSHED PILOT PROJECTS.

  (a) In General.--The Administrator, in coordination with the 
States, may provide technical assistance and grants for 
treatment works to carry out pilot projects relating to the 
following areas of wet weather discharge control:
          (1) Watershed management of wet weather discharges.--
        The management of municipal combined sewer overflows, 
        sanitary sewer overflows, and stormwater discharges, on 
        an integrated watershed or subwatershed basis for the 
        purpose of demonstrating the effectiveness of a unified 
        wet weather approach.
          (2) Stormwater best management practices.--The 
        control of pollutants from municipal separate storm 
        sewer systems for the purpose of demonstrating and 
        determining controls that are cost-effective and that 
        use innovative technologies in reducing such pollutants 
        from stormwater discharges.
  (b) Administration.--The Administrator, in coordination with 
the States, shall provide municipalities participating in a 
pilot project under this section the ability to engage in 
innovative practices, including the ability to unify separate 
wet weather control efforts under a single permit.
  (c) Funding.--
          (1) In general.--There is authorized to be 
        appropriated to carry out this section $10,000,000 for 
        fiscal year 2002, $15,000,000 for fiscal year 2003, and 
        $20,000,000 for fiscal year 2004. Such funds shall 
        remain available until expended.
          (2) Stormwater.--The Administrator shall make 
        available not less than 20 percent of amounts 
        appropriated for a fiscal year pursuant to this 
        subsection to carry out the purposes of subsection 
        (a)(2).
          (3) Administrative expenses.--The Administrator may 
        retain not to exceed 4 percent of any amounts 
        appropriated for a fiscal year pursuant to this 
        subsection for the reasonable and necessary costs of 
        administering this section.
  (d) Report to Congress.--Not later than 5 years after the 
date of enactment of this section, the Administrator shall 
transmit to Congress a report on the results of the pilot 
projects conducted under this section and their possible 
application nationwide.

         TITLE II--GRANTS FOR CONSTRUCTION OF TREATMENT WORKS

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SEC. 220. SEWER OVERFLOW CONTROL GRANTS.

  (a) In General.--In any fiscal year in which the 
Administrator has available for obligation at least 
$1,200,000,000 for the purposes of section 601--
          (1) the Administrator may make grants to States for 
        the purpose of providing grants to a municipality or 
        municipal entity for planning, design, and construction 
        of treatment works to intercept, transport, control, or 
        treat municipal combined sewer overflows and sanitary 
        sewer overflows; and
          (2) subject to subsection (g), the Administrator may 
        make a direct grant to a municipality or municipal 
        entity for the purposes described in paragraph (1).
  (b) Prioritization.--In selecting from among municipalities 
applying for grants under subsection (a), a State or the 
Administrator shall give priority to an applicant that--
          (1) is a municipality that is a financially 
        distressed community under subsection (c);
          (2) has implemented or is complying with an 
        implementation schedule for the 9 minimum controls 
        specified in the CSO control policy referred to in 
        section 402(q)(1) and has begun implementing a long-
        term municipal combined sewer overflow control plan or 
        a separate sanitary sewer overflow control plan; or
          (3) is requesting a grant for a project that is on a 
        State's intended use plan pursuant to section 606(c).
  (c) Financially Distressed Community.--
          (1) Definition.--In subsection (b), the term 
        ``financially distressed community'' means a community 
        that meets affordability criteria established by the 
        State in which the community is located, if such 
        criteria are developed after public review and comment.
          (2) Consideration of impact on water and sewer 
        rates.--In determining if a community is a distressed 
        community for the purposes of subsection (b), the State 
        shall consider, among other factors, the extent to 
        which the rate of growth of a community's tax base has 
        been historically slow such that implementing a plan 
        described in subsection (b)(2) would result in a 
        significant increase in any water or sewer rate charged 
        by the community's publicly owned wastewater treatment 
        facility.
          (3) Information to assist states.--The Administrator 
        may publish information to assist States in 
        establishing affordability criteria under paragraph 
        (1).
  (d) Cost Sharing.--The Federal share of the cost of 
activities carried out using amounts from a grant made under 
subsection (a) shall be not less than 55 percent of the cost. 
The non-Federal share of the cost may include, in any amount, 
public and private funds and in-kind services, and may include, 
notwithstanding section 603(h), financial assistance, including 
loans, from a State water pollution control revolving fund.
  (e) Administrative Reporting Requirements.--If a project 
receives grant assistance under subsection (a) and loan 
assistance from a State water pollution control revolving fund 
and the loan assistance is for 15 percent or more of the cost 
of the project, the project may be administered in accordance 
with State water pollution control revolving fund 
administrative reporting requirements for the purposes of 
streamlining such requirements.
  (f) Authorization of Appropriations.--There is authorized to 
be appropriated to carry out this section $750,000,000 for each 
of fiscal years 2002 and 2003. Such sums shall remain available 
until expended.
  (g) Allocation of Funds.--
          (1) Fiscal year 2002.--Subject to subsection (h), the 
        Administrator shall use the amounts appropriated to 
        carry out this section for fiscal year 2002 for making 
        grants to municipalities and municipal entities under 
        subsection (a)(2), in accordance with the criteria set 
        forth in subsection (b).
          (2) Fiscal year 2003.--Subject to subsection (h), the 
        Administrator shall use the amounts appropriated to 
        carry out this section for fiscal year 2003 as follows:
                  (A) Not to exceed $250,000,000 for making 
                grants to municipalities and municipal entities 
                under subsection (a)(2), in accordance with the 
                criteria set forth in subsection (b).
                  (B) All remaining amounts for making grants 
                to States under subsection (a)(1), in 
                accordance with a formula to be established by 
                the Administrator, after providing notice and 
                an opportunity for public comment, that 
                allocates to each State a proportional share of 
                such amounts based on the total needs of the 
                State for municipal combined sewer overflow 
                controls and sanitary sewer overflow controls 
                identified in the most recent survey conducted 
                pursuant to section 516(b)(1).
  (h) Administrative Expenses.--Of the amounts appropriated to 
carry out this section for each fiscal year--
          (1) the Administrator may retain an amount not to 
        exceed 1 percent for the reasonable and necessary costs 
        of administering this section; and
          (2) the Administrator, or a State, may retain an 
        amount not to exceed 4 percent of any grant made to a 
        municipality or municipal entity under subsection (a), 
        for the reasonable and necessary costs of administering 
        the grant.
  (i) Reports.--Not later than December 31, 2003, and 
periodically thereafter, the Administrator shall transmit to 
Congress a report containing recommended funding levels for 
grants under this section. The recommended funding levels shall 
be sufficient to ensure the continued expeditious 
implementation of municipal combined sewer overflow and 
sanitary sewer overflow controls nationwide.

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                    TITLE IV--PERMITS AND LICENSES

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            national pollutant discharge elimination system

    Sec. 402. (a) * * *

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  (q) Combined Sewer Overflows.--
          (1) Requirement for permits, orders, and decrees.--
        Each permit, order, or decree issued pursuant to this 
        Act after the date of enactment of this subsection for 
        a discharge from a municipal combined storm and 
        sanitary sewer shall conform to the Combined Sewer 
        Overflow Control Policy signed by the Administrator on 
        April 11, 1994 (in this subsection referred to as the 
        ``CSO control policy''), and shall provide for the 
        development and implementation of long-term control 
        plans to meet applicable water quality standards as 
        expeditiously as possible.
          (2) Water quality and designated use review 
        guidance.--Not later than December 31, 2000, and after 
        providing notice and opportunity for public comment, 
        the Administrator shall issue guidance to facilitate 
        the conduct of water quality and designated use reviews 
        for municipal combined sewer overflow receiving waters.
          (3) Report.--Not later than September 1, 2001, the 
        Administrator shall transmit to Congress a report on 
        the progress made by the Environmental Protection 
        Agency, States, and municipalities in implementing and 
        enforcing the CSO control policy.

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