[Senate Report 108-386]
[From the U.S. Government Publishing Office]
Calendar No. 772
108th Congress Report
SENATE
2d Session 108-386
======================================================================
WATER INFRASTRUCTURE
FINANCING ACT
__________
R E P O R T
of the
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
to accompany
S. 2550
together with
ADDITIONAL VIEWS
[Including cost estimate of the Congressional Budget Office]
October 7, 2004.--Ordered to be printed
_____
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512-1800
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
one hundred eighth congress
JAMES M. INHOFE, Oklahoma, Chairman
JOHN W. WARNER, Virginia JAMES M. JEFFORDS, Vermont
CHRISTOPHER S. BOND, Missouri MAX BAUCUS, Montana
GEORGE V. VOINOVICH, Ohio HARRY REID, Nevada
MICHAEL D. CRAPO, Idaho BOB GRAHAM, Florida
LINCOLN CHAFEE, Rhode Island JOSEPH I. LIEBERMAN, Connecticut
JOHN CORNYN, Texas BARBARA BOXER, California
LISA MURKOWSKI, Alaska RON WYDEN, Oregon
CRAIG THOMAS, Wyoming THOMAS R. CARPER, Delaware
WAYNE ALLARD, Colorado HILLARY RODHAM CLINTON, New York
Andrew Wheeler Majority Staff Director
Ken Connolly, Minority Staff Director
(ii)
C O N T E N T S
__________
Page
General Statement................................................ 1
Background....................................................... 2
Clean Water Act Program...................................... 2
Safe Drinking Water Act Program.............................. 3
Need for legislation......................................... 4
Objectives of the Legislation.................................... 5
Section-by-Section Analysis...................................... 5
Section 1. Short title; table of contents.................... 5
TITLE I--WATER POLLUTION INFRASTRUCTURE
Sec. 101. Technical assistance for rural and small treatment
works...................................................... 6
Sec. 102. Projects eligible for assistance................... 7
Sec. 103. Water pollution control revolving loan funds....... 9
Sec. 104. Affordability...................................... 9
Sec. 105. Water pollution control revolving loan funds....... 10
Sec. 106. Transferability of funds........................... 12
Sec. 107. Grants program..................................... 13
Sec. 108. Costs of administering water pollution control
revolving loan funds....................................... 14
Sec. 109. Allocation formula................................. 14
Sec. 110. Authorization of appropriations.................... 17
Sec. 111. Reports............................................ 17
Sec. 112. Pilot program for alternative water source
projects................................................... 17
Sec. 113. Wet weather grants................................. 18
Sec. 114. Technical correction............................... 18
TITLE II--SAFE DRINKING WATER INFRASTRUCTURE
Sec. 201. Technical assistance for small centers............. 18
Sec. 202. Labor standards.................................... 19
Sec. 203. Preconstruction work............................... 19
Sec. 204. Affordability...................................... 20
Sec. 205. Safe drinking water revolving loan funds........... 20
Sec. 206. Grants program..................................... 22
Sec. 207. Other authorized activities........................ 23
Sec. 208. Small system revolving loan funds.................. 23
Sec. 209. Authorization of appropriations.................... 24
Sec. 210. Removal of lead from drinking water in schools and
in the District of Columbia................................ 24
Sec. 211. Small public water system assistance program....... 28
Sec. 212. Small public water system assistance program....... 30
TITLE III--MISCELLANEOUS
Sec. 301. Definition of Administrator........................ 31
Sec. 302. Demonstration grant program for water quality
enhancement and management................................. 31
Sec. 303. Cost of service study.............................. 33
Sec. 304. State revolving fund review process................ 34
Sec. 305. Southeast Colorado safe drinking water supply...... 34
Sec. 306. Assessment of perchlorate contamination............ 35
Sec. 307. National estuary program........................... 35
Sec. 308. Sewage control technology grant program............ 36
Sec. 309. Special water resources study...................... 36
Legislative History.............................................. 38
Hearings......................................................... 38
Rollcall Votes................................................... 40
Regulatory Impact Statement...................................... 42
Mandates Assessment.............................................. 42
Appendix......................................................... 43
Letter, Association of State Drinking Water Administrators... 43
Letter, Rural Community Assistance Program................... 46
Memorandum, United States Environmental Protection Agency.... 52
Cost of Legislation.............................................. 54
Additional Views of Senators Jeffords, Baucus, Reid, Graham,
Lieberman, Wyden, Carper, and Clinton.......................... 58
General Statement............................................ 58
Background................................................... 58
Discussion................................................... 59
Summary of Issues............................................ 61
Davis Bacon.................................................. 62
Clean Water Act.......................................... 62
Safe Drinking Water Act.................................. 63
Lead in Drinking Water....................................... 64
EPA Regulations on Lead in Drinking Water................ 64
Washington D.C. Experience............................... 66
Committee Action......................................... 66
Committee Mark-Up of S. 2550, June 23, 2004.............. 68
Deference to Local Governments............................... 72
Incentives for Compliance.................................... 74
Grants....................................................... 75
CWA Funding Formula.......................................... 76
Project Authorizations....................................... 76
Additional Views of Senator Jeffords............................. 79
Letter, from Hon. Jon Kyl, U.S. Senator from the State of
Arizona.................................................... 79
Changes in Existing Law.......................................... 80
Calendar No. 772
108th Congress Report
SENATE
2d Session 108-386
======================================================================
WATER INFRASTRUCTURE FINANCING ACT
_______
October 7, 2004.--Ordered to be printed
_______
Mr. Inhofe, from the Committee on Environment and Public Works,
submitted the following
R E P O R T
[to accompany S. 2550]
together with
ADDITIONAL VIEWS
[Including cost estimate of the Congressional Budget Office]
The Committee on Environment and Public Works, to which was
referred a bill (S. 2550) to amend the Federal Water Pollution
Control Act and the Safe Drinking Water Act to improve water
and wastewater infrastructure in the United States, having
considered the same reports favorably thereon with amendment
and recommends that the bill, as amended, do pass.
General Statement
S. 2550 is a bill which amends the Federal Water Pollution
Control Act (CWA) and Title XIV of the Public Health Service
Act (Safe Drinking Water Act) to reauthorize the State
Revolving Loan Funds (SRF) in each Act. The bill also creates a
research and demonstration program to develop new water and
wastewater treatment approaches and technologies; authorizes a
study of the nation's water resources and creates several
targeted grant programs to address specific water and
wastewater problems.
Background
Clean Water Act Program
Enacted in 1948 and comprehensively amended in 1972, 1977,
1981 and 1987, the CWA governs the discharge of pollution into
the nation's navigable waters. The 1972 amendments strengthened
the Federal construction grants program (Title II) through
which the Federal Government provided grants to municipalities
to construct publicly owned wastewater treatment plants
(POTWs). The Federal share of the projects was increased from
55 percent to 75 percent of the total project cost. Five years
later, in 1977, Congress increased the role of States in
managing the construction grants program and provided new
incentives to address wastewater needs with innovative or
alternative treatment technologies. Congress continued to
transition the program to the States by returning the Federal
cost share to 55 percent in its 1981 amendments to the Act.
However, by 1987 concerns remained about how best to fully
transition the program to one primarily funded by the States
and local governments. As such the 1987 amendments further
reformed the way the Federal Government assisted local
governments in meeting the costs of water infrastructure
projects. Recognizing a need to extend the life of each dollar
in the system, Congress adapted an innovative approach, called
the State Revolving Loan Fund (SRF) through which States would
receive an annual grant with which they would capitalize
revolving loan funds. Once a town repaid a loan, the money
could then be loaned again to another community. The
construction grants program was phased-out over the next 5
years giving States ample time to get their SRFs fully
operational. The authorization for the construction grants
program ended in 1990. The authorization for the SRF ended in
1994, after a sharp decline in its authorization level from
$1.2 billion in 1993 and $600 million in 1994. This decline and
eventual elimination of the authorization level is a clear
signal that Congress intended for the Federal contribution to
end and for the States and localities to assume full
responsibility for the cost of building their treatment works.
The 1987 amendments also created an allocation formula
according to which States would receive their annual share of
the Federal appropriation. The formula gave each State a
prescribed percentage that except for a few minor adjustments
in the 1990's to account for the end of financing to three of
the U.S. territories has remained the same for the past 17
years. There is growing concern that the current formula is no
longer reflective of which States have the greatest need for
infrastructure funds.
In order to receive their share of the Federal pot of
money, each State signs a capitalization agreement with the
Environmental Protection Agency (EPA) which includes a
commitment to match 20 percent of the Federal grant. States are
further required to create a priority list of projects that are
eligible for funding using criteria chosen by the State. The
State is not required to fund according to the order projects
appear on the list largely because at any one time a
particularly large project may not have the local funds in
place. Further, a State may place those projects along a
particular water body highest on its priority list but would
still need to provide funds to projects with perhaps great
local importance, but less statewide significance. The loans
are available at market rates or below and must be repaid
within 20 years, the typical life of a treatment works.
Congress envisioned States providing loans expeditiously but
also leveraging some of money to gain interest and grow their
individual funds.
Currently, POTWs, projects contained in a State's nonpoint
source pollution plan (section 319) and projects contained in a
State's estuary comprehensive, conservation and management plan
(section 320) are eligible for funding. States have provided
$1.7 billion for nonpoint source projects and estuary-related
projects. The Clean Water Act and some State laws do not allow
privately owned treatment works to access the SRF.
Safe Drinking Water Act Program
In 1974, Safe Drinking Water Act (SDWA) was first enacted
as an amendment to the Public Health Services Act through which
the EPA had previously regulated contaminants in drinking
water. The Act was substantially amended in both 1986 and 1996.
The 1974 law provided the EPA with authority to regulate
drinking water contaminants while providing the States with
authority over the implementation and enforcement of the EPA
established standards. The Public Health Service Act required
the regulation of 22 contaminants. In 1986, Congress amended
SDWA to require the EPA to issue regulations for 83 other
contaminants by June 1989 and 25 others every 3 years
thereafter. The EPA was also required to publish regulations
for the disinfection and filtration of public water supplies.
Because the EPA, the States and public water systems had
difficulty with the requirements of the 1986 amendments,
Congress again amended SDWA in 1996.\1\ Congress replaced the
requirement that the EPA regulate 25 contaminants every 3 years
with a requirement that beginning in 1998 and each 5 years
thereafter, the EPA publish a list of contaminants that may
need to be regulated and beginning in 2000 and each 5 years
thereafter determine whether or not to regulate five of those
contaminants. Concern over how communities, particularly small
systems, would pay to meet these requirements and upgrade their
systems lead Congress to duplicate the Clean Water SRF with the
Drinking Water SRF.\2\ Similar in many ways to the Clean Water
SRF, the Drinking Water SRF provides communities with access to
a State managed loan program. However, Congress took this
opportunity to improve upon the SRF structure with many changes
not included in the Clean Water program that were designed to
increase State flexibility. To begin, to address the needs of
disadvantaged communities, the SDWA provides States with
authority to provide negative interest loans and principal
forgiveness for disadvantaged communities through the Drinking
Water SRF and give these disadvantaged communities 30 years to
repay the loan. The Drinking Water SRF's authorization of $1
billion expired in 2003.
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\1\Senate Report 104-169 accompanying Safe Drinking Water
Amendments Act of 1995. Page 10.
\2\Ibid, pages 11-12.
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Similar to the clean water program, States must also create
a priority list but are required to fund in order with a
``ready-to-proceed'' exception so that State programs do not
sit idle if the project at the top of its list is delayed in
getting the local share of financing in order. States are
required to give first priority to those projects which address
the most serious risk to human health, are necessary to ensure
compliance, and assist systems most in need on a per household
basis. The States are required to match 20 percent of the
annual Federal capitalization grant. Private utilities are
eligible for the Drinking Water SRF.
The SDWA also distributes money to the States based on a
formula. However, unlike the clean water formula, the drinking
water formula changes every 4 years with the publication of
EPA's drinking water needs assessment, mandated by the Safe
Drinking Water Act. States are required to document and submit
to EPA the funding requirements for their communities to meet
the costs of the Act. EPA then determines what percent of the
nationwide need each State has. The formula for the
distribution of Federal funds is the State's percent of the
nationwide need adjusted to ensure that those States with less
than 1 percent of the nationwide need, receive 1 percent of the
funding. This amount would assist small States, which otherwise
might not receive enough funds to provide adequate assistance
to their communities, in maintaining viable programs.
Need for legislation
The SRFs have been very successful in dispersing assistance
to POTWs and PWSs throughout the country. The State Clean Water
SRFs have funded $43.5 billion since their creation providing
more than 14,000 loans to communities across the country. It is
important to note that some of these projects are initiated and
implemented by nongovernmental entities that may experience
difficulty in some States in applying for and receiving SRF
funds. The Drinking Water SRF has provided 1,776 loans totaling
over $3.8 billion. Of this amount, $1.5 billion went to assist
systems that serve fewer than 10,000 households. However, the
need for infrastructure dollars continues to grow and according
to several studies, outpaces what the Nation as a whole spends.
The Environmental Protection Agency (EPA) conducts two
surveys, every 4 years, of the States' water and wastewater
needs. According to the two most recent needs surveys for water
(2001) and wastewater (2002), EPA estimates the nationwide need
to be $331 billion over 20 years. There are also several
independent analyses of the ``gap'' between what the Nation as
a whole currently spends on infrastructure and what the Nation
needs to spend. In 1999, the Water Infrastructure Network, a
consortium of water and wastewater providers, researchers,
environmentalists, engineers and product manufacturers,
released a study claiming the annual need is $23 billion.\3\
The Congressional Budget Office released a gap analysis in
which it concluded the gap for wastewater ranges, depending on
various financial and accounting variables, from $23 billion to
$37 billion per year and the gap for drinking water ranges from
$25.5 billion to $39.3 billion per year.\4\ The EPA also
conducted a gap analysis, separate from the various needs
surveys, in which it said the gap ranged from $3 billion to
$26.7 billion a year.\5\ It is important to note that these
numbers reflect the gap in both capital construction costs and
operations and maintenance costs, the latter of which the
Federal Government does not fund. Operations and maintenance
are the responsibility of the local utility.
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\3\Clean and Safe Water for the 21st Century; Water Infrastructure
Network. 2000. page ES-1.
\4\U.S. Congressional Budget Office. ``Future Investment in
Drinking Water and Wastewater Infrastructure.'' 2002. page x and 11.
\5\The U.S. Environmental Protection Agency. ``The Clean Water and
Drinking Water Gap Analysis.'' 2002. page 43.
---------------------------------------------------------------------------
While it remains the committee's intent to fulfill
Congress' 1987 CWA goal and turn this program entirely over to
the States, the committee, for the second consecutive Congress,
has acknowledged that the nationwide need continues to far
outpace the amount of funding that is available from all levels
of government. Therefore, the committee and the Congress has
maintained a commitment to fund the programs until the SRFs
revolve at levels sufficient to meet the needs of local
communities. For instance, in 1995, when appropriations were
supposed to cease, the Clean Water SRF received $1.2 billion,
double the previously authorized level. The lowest amount of
funding it received was $625 million in 1997. Since the
expiration of the Act's authorization in 1994, annual
appropriations have fluctuated. In the past several years,
annual appropriations have stayed around $1.35 billion.
However, this amount and the $850 million annually provided to
the Drinking Water SRF are not sufficient. Each level of
government--local, State and Federal--must assess what it is
currently contributing, add to the available funds, and
determine how to increase efficiencies in their systems to make
the most of the funds in the system.
Objectives of the Legislation
S. 2550 seeks to update the two State Revolving Loan Funds
(SRF), which are the primary Federal funding mechanisms for
clean water and drinking water. Both SRFs are expired and in
need of moderate updating. The Clean Water SRF lacks many of
the flexibility mechanisms that are currently a part of the
drinking water program. The bill also seeks to promote the
research and development of new ways of meeting water quality
goals through a research and demonstration pilot program.
Finally, the bill would help communities meet the costs
associated with many regulatory requirements by providing
limited and directed grant assistance.
Section-by-Section Analysis
Section 1. Short Title; Table Of Contents.
This section designates the title of the bill as ``Water
Infrastructure Financing Act'' and lists the table of contents.
Title I--Water Pollution Infrastructure
Sec. 101. Technical assistance for rural and small treatment works.
Summary
This section adds Section 222 to the Clean Water Act in
which it defines ``Qualified Nonprofit Technical Assistance
Provider'' as a qualified nonprofit technical assistance
provider of water and wastewater services to rural communities
of 10,000 users and fewer.
Section 222(b) will create a grant program through which
the Administrator may make grants to qualified nonprofit
technical assistant providers to:
(A) Assist small POTWs in planning, developing and
obtaining financing for eligible projects, defined in section
603(c) of the Clean Water Act;
(B) To capitalize revolving loan funds, in consultation
with the State, to rural and small municipalities for
predevelopment costs, including costs for planning, design,
associated preconstruction, and necessary activities for citing
the facility and related elements, or short-term costs incurred
for equipment replacement that is not part of a regular
operation and maintenance activities. Loan terms cannot exceed
10 years and loans cannot exceed $100,000. Loan repayments will
be credited to the fund maintained by the qualified nonprofit;
(C) Provide technical assistance and training for rural and
small POTWs and decentralized wastewater treatment systems to
enable them to protect water quality and achieve and maintain
compliance with the Act; and
(D) To disseminate information to rural and small
municipalities with respect to planning, design, construction
and operation of POTWs and decentralized wastewater treatment
systems. The Administrator shall to the maximum extent
practicable ensure that grants are made available in each
State. The nonprofit provider will submit a report to the
Administrator detailing the number of communities served, the
sizes of those communities and the types of financing provided
by the nonprofit provider.
Section 222(c) will authorize $25 million for each fiscal
year 2005 through 2009.
Discussion
According to EPA, more than 70 percent of the nation's
housing units with inadequate plumbing are in small
communities. More than 19 million households in small
communities are on septic systems or cesspools as their primary
source of treatment.\6\ The 2000 EPA Clean Watersheds Needs
Survey indicates that small systems, those serving fewer than
10,000 households, represent about 10 percent of the nationwide
funding need, or $16 billion. 74 percent of wastewater
treatment systems serve small communities which accounts for
only 12 percent of the nation's population. While the needs of
these communities are great, the ability of their ratepayers to
pay the costs of those needs is limited.
---------------------------------------------------------------------------
\6\The U.S Environmental Protection Agency, ``Wastewater Treatment
Programs Serving Small Communities.'' (EPA 832-R-02-004.) December
2002. Page 1.
---------------------------------------------------------------------------
The Environmental Protection Agency has several existing
programs aimed at helping small systems and unsewered
communities maintain and upgrade their systems. The National
Environmental Training Center for Small Communities develops
and delivers training courses for both POTWs and drinking water
systems operators. The National Small Flows Clearinghouse
provides information about treatment options and the Operator
On-Site Technical Assistance Program (section 104(g) of the
Clean Water Act) provides compliance assistance to small POTW
operators as well as help with maintenance and financing.
The committee however continues to hear of a need for
additional assistance for these small systems. In a letter to
the committee on February 5, 2004, the Rural Community
Assistance Program cited the need for assistance with
predevelopment costs. Many small POTWs cannot afford the costs
associated with planning a project, including the engineering
costs. Without these initial steps completed, the POTW often
has difficulty applying for an SRF loan to begin construction.
The Rural Community Advancement Program, for example, runs
several small SRFs in States to assist small POTWs with these
startup costs, enabling them to then apply for funds through
the State-run SRF for construction costs. Section 101 enables
the Administrator to provide money to nonprofit technical
assistance providers to create and run these smaller SRFs. This
section also provides nonprofit technical assistance providers
with funds to assist treatment works in identifying and
securing financing for projects; provide technical assistance
to operators of systems on how to best manage their POTW and
meet regulatory requirements. It also authorizes funds for the
dissemination of information on financing, system management
and water quality for small systems.
Sec. 102. Projects eligible for assistance.
Summary
This section amends Section 603(c) of CWA by modifying the
project eligibility list with several changes. 102(c)(1)
mandates projects comply with Section 513, which requires
payment of a prevailing wage to all workers on a Federal
construction project.
Section 102(c)(2) establishes that funds can be used only
to provide assistance to a municipality, intermunicipal,
interstate or State agency, or private utility that principally
treats municipal wastewater or domestic sewage for
construction, including costs of planning, design, associated
preconstruction and necessary activities for citing the
facility and related elements of a treatment works;
implementation of management program under Section 319;
development and implementation of a management plan under
section 320; water conservation projects, the primary purpose
of which is to protect, preserve or enhance water quality,
including piping and lining of irrigation canals, recovery or
recycling of wastewater or runoff from irrigation, irrigation
scheduling, measurement or metering of water use; or
improvement of on-field irrigation efficiency; projects by a
municipality intermunicipal, interstate or State agency to
increase security at a POTW, excluding operation and
maintenance costs; to control municipal stormwater runoff; and
reuse, reclamation or recycling projects the primary purpose of
which is the preservation, protection or enhancement of water
quality.
Discussion
Section 513 of the Clean Water Act applies Davis Bacon
prevailing wage standard to all federally funded grant programs
created within the Clean Water Act. Section 602 of the Act
defines the terms under which the SRFs will function. As stated
in 602(b)(6), Davis Bacon applies to those projects funded in
whole or in part by ``funds directly made available by Federal
capitalization grants.'' The statute clearly required Davis-
Bacon to apply only to the first distribution of funds because
the first loan is the only one made directly available from the
capitalization grants. State law would guide subsequent
``revolutions'' of the money - loans made from repaid loan
funds. As Senator George Mitchell, the bill manager, stated on
the floor during consideration of the 1987 amendments, ``This
restriction [meaning Davis Bacon and others] on the use of
Federal capitalization grant funds does not apply to funds
contributed by the State . . . moneys repaid to the fund or
other money.''\7\
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\7\U.S. Congress. Committee on Environment and Public Works. ``A
Legislative History of the Water Quality Act of 1987 (Public Law 100-4)
Including Public Law 97-440; Public Law 97-117; Public Law 46-483; and
Public Law 96-148.'' Senate Report 100-414. Page 375.
---------------------------------------------------------------------------
Section 602 also states that Davis Bacon and several other
provisions of the law apply only to those treatment works
constructed prior to September 30, 1994. Along with Davis
Bacon, 15 other provisions of the old Title II construction
grants program were applied to the SRF until September 30,
1994. When the program's authorization expired, so did EPA's
authority to continue to require States to apply any of these
provisions to their programs. Section 102(c)(1) of S. 2550 for
the first time imposes Davis Bacon on every project funded
through the SRF regardless of whether it is from the initial
capitalization grant or subsequent rounds of loans.
By clarifying that preconstruction activities are eligible
for funding, Section 102(c)(2) ensures treatment works are able
to receive financing for engineering costs and other planning
costs that precede actual construction. This provision will
ensure that small communities with few resources available to
develop a project in its early stages can receive assistance
for pre-construction activities.
This provision maintains current law eligibility of both
section 319 and section 320 projects.
It would extend eligibility to privately owned treatment
works. These systems are currently not eligible for assistance
through the SRF.
It also would extend eligibility to water conservation
projects, the primary purpose of which is the protection,
preservation or enhancement of water quality. While typically
seen as a problem for western States, water supply has become a
nation-wide concern. One aspect of the problem is the lack of a
clean water supply not just the lack of water in general. This
provision envisions enabling States and localities to fund
water conservation, reuse, recycling and reclamation projects
that will enhance the supply of clean, safe water.
After the terrorist attacks of September 11, much attention
is being paid to security at the nation's treatment works.
While EPA currently allows POTWs to use the SRFs for security-
related costs, this provision would state the eligibility in
statute, clarifying that in fact capital costs are eligible.
Security costs associated with operations, maintenance and
personnel are not eligible for the SRF.
Finally, with finalization of the stormwater Phase II
regulations (64 FR 68721), municipalities across the country
face additional expenses trying to reduce and mitigate
contaminated stormwater. Because there has been some confusion
over whether these projects are eligible for SRF funding, this
provision clarifies that these costs are in fact eligible for
SRF loans.
Sec. 103. Water pollution control revolving loan funds.
Summary
This section amends the types of assistance that can be
offered through the SRF to include a revolving loan fund
operated by a municipal, intermunicipal or interstate entity,
State, public or private utility, corporation, partnership,
association, or nonprofit agency to fund projects that are part
of a 319 or 320 implementation. The loans must be fully paid
within 30 years of their issuance.
Discussion
Projects included in a State's estuary and nonpoint source
implementation plans can often most effectively be implemented
by small, nonprofit organizations which traditionally have had
difficulty accessing State SRFs. The loan process is often
better suited for governmental entities than small, local,
watershed organizations. By allowing an entity to operate a
smaller SRF, this provision seeks to make it easier for locally
based watershed organizations to receive funding to fulfill the
objectives of a State approved 319 or 320 project.
Sec. 104. Affordability.
Summary
This section amends Section 603 by adding a subsection (e)
which includes a series of flexibility mechanisms designed to
improve assistance provided to disadvantaged communities and
increase the flexibility offered to States. These provisions
are similar to provisions already in existing law in the SDWA.
Section (e)(1) defines ``disadvantaged community'' as a
service area, or portion of a service area that meets State
affordability criteria,
Section (e)(2) provides the State with authority to provide
additional subsidization, including principal forgiveness, to a
disadvantaged community or one the State expects to become
disadvantaged as a result of a project.
Section (e)(3) limits the total loan subsidy to no more
than 30 percent of the State's annual capitalization grant.
Section (e)(4) allows the State to extend the life a loan
from the current statutory limit of 20 years to 30 years but
not to exceed the expected design life of the facility.
Section (e)(5) authorizes the Administrator to publish
information to assist States in establishing affordability
criteria.
Discussion
Tom Morrissey, President of the Association of State and
Interstate Water Pollution Agencies testified on February 28,
2002, ``States strongly support principal forgiveness.'' This
section takes principal forgiveness and other flexibility
mechanisms proposed from the Safe Drinking Water Act and
applies them to the Clean Water program. These flexibility
mechanisms provide the State with the ability to provide
additional assistance to disadvantaged communities, such as
forgiveness of their loans or zero-interest loans. It also
allows the State to provide a 30-year loan instead of the
current 20-year loan, provided the loan does not exceed the
life of the asset. New to both SRFs is the ability of the State
to provide these additional benefits to communities that may
not meet a State's criteria for a disadvantaged community as a
whole, but may have a ``portion of a service area'' that does
meet the criteria. Many large cities do not qualify as
disadvantaged under their State's definition of the term
because they have pockets of low-income ratepayers and industry
and pockets of affluent ratepayers. Under Section 204(b) of the
CWA, POTWs are prohibited from raising rates on one sector of
ratepayers, i.e. industry, in order to offset a cut in rates to
another sector, i.e. residential if the facility has ever
received Federal grant money. Most of today's treatment works
were funded at least in part with Title II construction grant
dollars. Further, it is often politically difficult to raise
rates only on those people with a proven ability to pay. In
order to assist cities struggling to pay for infrastructure
upgrades without imposing too high a burden on their low-income
ratepayers, this provision makes them eligible for
disadvantaged assistance.
Sec. 105. Water pollution control revolving loan funds.
Summary
This section amends section 603(h) of the Clean Water Act.
Section (h)(1) adds several definitions including:
``Restructuring'' as the consolidation of management functions
or ownership with another facility or the formation of
cooperative partnerships; and ``Traditional Wastewater
Approach'' as a managed system used to collect and treat
wastewater from an entire service area consisting of collection
sewers, a centralized plant using physical or chemical
treatment processes, and a direct point of discharge to surface
water.
Section h(2)(A) requires States to amend their existing
priority system so that projects would be more likely to
receive assistance by submitting such other information as
determined by the State, and:
(i) An inventory of assets, including a description of
those assets
(ii) A schedule for replacement of those assets
(iii)A financing plan indicating sources of revenue
(iv)A review of options for restructuring the treatment
works
(v) A review of options for approaches other than
traditional wastewater approach that may include actions or
projects that treat or minimize sewer or urban storm water
discharges including decentralized or distributed storm water
controls, decentralized wastewater treatment, low impact
development technologies, stream buffers, wetland restoration
and actions to minimize the amount of and direct connections to
impervious surfaces.
Section h(2)(B) requires States to, in the development of
the priority system, take into consideration appropriate
chemical, physical and biological data that the State considers
reasonably available and of sufficient quality
Section h(2)(C) requires the States to provide for public
notice and opportunity to comment on the priority system and
list
Section h(2)(D) requires the State to publish, not less
than biennially, a description of the projects in the State
that are eligible for assistance including each project's
priority ranking and the funding schedule; and
Section h(2)(E) requires the State to ensure that projects
are designed to achieve the optimum water quality management,
consistent with the public health and the requirements of the
Act.
Discussion
Current law requires States to establish a list of projects
that are eligible for, and have submitted applications for,
funding. The State then provides SRF funds to as many projects
on the list as it can with the available funds. As a State puts
together its priority list, it can assign priority based on
whatever system the State develops to meet its needs. Section
105 of S. 2550 would require the States to add other factors to
their system for determining priority. The decision on how much
weight to give each of these additional factors is left to the
State. A State may choose, for example, to give the most
priority points to systems that serve under 10,000 households
or who have a median income below the poverty level even though
S. 2550 does not refer to these criteria. However, the factors
listed in this section must be used to give a project higher
priority when determine which projects to fund in a given year
from a State's priority list.
The factors to which a State must give additional weight
include an inventory of assets, including a description of the
condition of those assets and a schedule for replacing those
assets. Aging systems are significant contributors to the
infrastructure-financing gap. 27 percent of drinking water
utilities and 31 percent of wastewater utilities did not have
plans for managing their existing capital assets.\8\ According
to a 2002 General Accounting Office (GAO) report, GAO found
that ``roughly half of the utilities actually rehabilitated or
replaced 1 percent or less of their pipelines annually'' even
though 89 percent of drinking water utilities and 76 percent of
wastewater utilities believed a higher level was necessary to
maintain their systems.\9\ In order to fully understand the
scope of the problem the Nation faces, there must be an
accounting of the health of our utilities. Further, if
utilities are to make maximum use of the funds available, it
makes good business sense to have a full understanding of the
condition of one's assets and how much capital will need to be
raised to replace those assets and over what amount of time.
---------------------------------------------------------------------------
\8\U.S. General Accounting Office. Water Utility Financing and
Planning. (GAO-02-764). August 2002. Page 7.
\9\Ibid, page 42.
---------------------------------------------------------------------------
Additional factors include a financing plan indicating how
that capital will be raised including rate increases, grant
assistance, bonds, loans or other sources. In its 2002 report,
of the utilities surveyed, GAO found that 85 percent of
drinking water utilities and 82 percent of wastewater utilities
were able to cover operations and maintenance costs through
local user fees. However, an estimated 29 percent of the
utilities had to defer maintenance because of insufficient
funding.\10\ Providing additional weight to projects that have
these elements in place will encourage those utilities that
don't have them, to create asset management and financing
plans. The committee hopes giving these elements additional
weight will also result in those utilities that already have
them in place to review their plans and take whatever steps
necessary to update them and if necessary, seek additional
funding to properly maintain their systems.
---------------------------------------------------------------------------
\10\Ibid, page 6.
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POTWs will also receive additional credit if they have
reviewed options for restructuring their treatment works. It
some cases, it may be more efficient and cost effective for a
utility to consolidate with a neighboring one, develop a
partnership with the local energy provider, or consider other
cooperative partnerships like public-private partnerships or
privatization. These are all encompassed in the term
restructuring, the goal of which is to improve upon the
management and financial structure of a utility to ensure it is
operating as efficiently and cost-effectively as possible.
POTWs are also encouraged to look at nontraditional
approaches, including decentralized or distributed storm water
controls, decentralized wastewater treatment, low impact
development technologies and stream buffers. Communities are
experimenting with approaches other than traditional treatment
and constructed conveyances to reduce contaminated runoff,
reducing the amount of water entering a treatment works or
adjoining waterways. These approaches may, in addition to
possibly being more environmentally friendly than concrete and
pipes, be more affordable. Particularly in small, rural
communities, properly maintained decentralized wastewater
treatment systems may also be an affordable alternative to a
treatment works.
Sec. 106. Transferability of funds.
Summary
Each year the Committee on Appropriations in the
appropriations bill for Veterans' Affairs, Housing and Urban
Development and Independent Agencies includes a provision
allowing States to transfer portions of a State's
capitalization grant from one SRF to the other and back again.
Section 106 permanently extends the authority to transfer no
more than 33 percent of a State's Clean Water capitalization
grant into the Drinking Water SRF. It clarifies that the funds
transferred cannot be considered by a State to meet its SDWA
requirement to match the Federal capitalization grant for the
Drinking Water SRF by 20 percent.
Discussion
This section provides the States with much needed
flexibility to manage their water programs holistically. In any
one year, a State may have a particularly large drinking water
or clean water project for which it needs additional funds.
This provision allows them to transfer some money from one
account to the other while protecting the corpus of the funds.
Sec. 107. Grants program.
Summary
This section creates a new provision in the CWA, 603(k)
that directs a State to set aside a portion of its SRF for
grants to eligible projects under the following conditions:
(k)(1) Requires States, in any year in which appropriations
do not exceed $3 billion, to set aside 10 percent of its
capitalization grant. The grants cannot exceed 55 percent of
the project cost. This section allows the State to waive this
set-aside if the average time for processing loan applications
during the preceding 12 months does not exceed 90 days.
(k)(2) Requires the States, in any year in which
appropriations exceed $3 billion, to set aside not more than 10
percent nor less than 5 percent of its revolving loan fund
Discussion
By including a grant component within the SRF, this section
seeks to keep the Nation focused on the SRFs as the primary
funding mechanism for clean water. The bill acknowledges there
is a growing interest in providing POTWs with grant funds to
help meet those costs associated with Federal regulatory
mandates. The daily costs associated with operations and
maintenance continue to be a local responsibility with the
Federal assistance available for capital improvements through
the SRF program.
This section would require the States to provide a portion
of their SRFs as a grant to local communities. By maintaining a
single funding source, rather than creating a new, competing
program, the focus remains on the SRF and the need to ensure it
receives adequate funding to meet the needs of local
communities. The small amount of the set-aside, ensures that
the corpus of the fund is protected well into the future by
devoting the vast majority of funds to the loan program.
Further, by incorporating the grant into the SRF, funding for
the grant portion is more likely to be appropriated as the
Clean Water SRF is a program that regularly receives annual
appropriations. Whereas Congress has authorized grant programs
that have not received actual appropriations, the SRF annually
receives funding and the linkage to the grant program ensures
that the grants too will receive funding.
Another goal of this section is to provide a quick infusion
of grant funds to communities. The bill allows States to waive
the requirement to set-aside 10 percent of the capitalization
grant if appropriations do not exceed $3 billion if the State
improves the time it takes to process the loan applications.
The time it takes to receive funding through the SRF is a
prominent complaint by municipal recipients and one the
committee was urged to address by the Paul Pinault, President
of the Association of Metropolitan Sewerage Agencies on
February 28, 2002 during his testimony before the Fisheries,
Wildlife and Water Subcommittee. This too would ensure that
funds become available more quickly than under the current
system. With the incentive of avoiding a Federal mandate on the
use of their SRF funds, the committee believes States will have
an incentive to increase the speed of their loan application
process.
Sec. 108. Costs of administering water pollution control revolving loan
funds.
Summary
This section increases the percentage of funds a State is
authorized to set-aside for program administration from 4
percent to 6 percent.
Discussion
States incur significant costs administering the SRFs, a
responsibility given them by Congress in the 1987 amendments to
the CWA. While the committee does not anticipate that the
requirements in this bill will result in new administrative
burdens to the States, with the intended increase in
appropriations authorized by this bill to the program, it is
reasonable to allow States to reserve a larger, but still
small, percentage of the SRF to pay their administrative costs.
Sec. 109. Allocation formula.
Summary
This section creates a new allocation formula. It creates
several definitions.
(1) Defines the base formula as the current formula
outlined in section 205(c)(3) of the CWA.
(2) Defines the needs survey as that conducted by EPA under
section 516(2).
(3) Defines the ``needs survey percentage'' as what percent
of the nationwide need for Categories I through VII of the most
recent needs survey an individual State's need is.
(4) Defines the ``next needs survey'' as that occurring
after the 2000 needs survey, the most recently completed
survey.
(5) Defines a ``State'' as a State, the District of
Columbia and the Commonwealth of Puerto Rico.
Section 109(b) lays out the new formula first by requiring
the Administrator, before dispersing funds to the States, to
set-aside 1.5 percent of the annual appropriation for Indian
tribes, as defined in section 518(c) of the CWA. The
Administrator is also required to take 0.25 percent of the
annual appropriation for the territories of the United States.
Section 109(b)(4)(A) establishes a target allocation for
all States. The target for those States for which the needs
survey percentage is less than 1 percent, shall be 1 percent.
The target for those States for which the needs survey
percentage is greater than 1 percent, shall be the needs survey
percentage.
Section 109(b)(4)(B)-(D) Sections 109(b)(4)(B)-(D)
establish a transition period during which the allocation to
each State (which is a percentage of the whole) begins moving
from its current level to its target allocation. During this
transition, States fall in three groups as follows. First,
States with a target allocation of 1 percent receive
successively higher amounts each year from fiscal year 2005 to
2009 and then remain flat (provided in subparagraph (B)).
Second, States with larger target allocations that meet
criteria for large, continuing needs (provided in subparagraph
(C)) maintain their allocation and, in cases of large growth in
needs, receive additional money described in subparagraph (D).
Third, States with target percentages higher than 1 percent but
that do not meet the criteria for large, continuing need
receive immediately their needs survey percentage, and in cases
of large growth in needs, receive additional money as described
in subparagraph (D).
Specifics of the transition follow. Section 109(b)(4)(B)
provides that each State with a target percentage of 1 percent
is limited in the growth of its allocation between its base
formula and 1 percent as follows: in 2005, these States can
rise only 12 percent; in 2006, 16 percent; in 2007, 20 percent;
in 2008, 24 percent; and in 2009 and each year thereafter, 28
percent above the base formula allocation. These limits on
growth release once appropriations reach $3.15 billion because
at that level all States receive a larger amount of money by
their target allocations than current appropriations provide by
their current allocation. For those States with a needs survey
percentage of greater than 1 percent, the growth in allocation
relative to the base formula is limited to zero during the
transition, but some of these States receive additional funds
as described in subparagraph (D).
Section 109(b)(4)(C) provides that States will receive at
least their current dollar amount allocation if their needs
survey percentages are 1 percent or less or if they meet one of
three criteria indicating large, continuing needs. The criteria
indicating large, continuing needs are higher needs in both
categories V and VII between the previous and current needs
surveys, growth in population between the 1990 decennial census
and the 2000 decennial census, or have a population equal to 4
percent of the total national population as reported in the
2000 decennial census.
Section 109(b)(4)(D) provides additional funds to States
reporting large growth in needs. Subparagraph (D) defines large
growth in needs as a report of higher needs in both dollar
terms and as a percentage of nationwide need. Such States
receive extra funds when annual appropriations are less than
$1.38 billion. When annual appropriations exceed $1.38 billion,
subparagraph (D) extends provision of additional funds also to
those States with large, continuing needs as described in
subparagraph (C), regardless of whether those States also
reported large growth in needs.
Section 109(f) allows States to reserve the greater of 2
percent of $100,000 for statewide water quality planning.
Discussion
The formula recognizes that in order for the Nation to
address the overall national need, each State will continue to
need at least the amount of its current allocation. The formula
also recognizes that some States receive allocations so small
as to be negligible for developing new infrastructure. The
underlying policy statement of the formula is that allocations
should be determined by each State's percentage of need in the
latest Needs Survey with no State receiving less than 1 percent
of the total.
To shift from the current allocation to the target
allocation under the Needs Survey - while simultaneously
continuing to address the overall national need - the
allocation to small States must increase while larger
allocations cannot shrink. The formula reconciles this dilemma
by limiting the growth in allocation to all States first until
small States begin to grow, and then until appropriations rise
to a level at which all States grow.
To limit growth of all States and limit losses rationally,
the formula recognizes three special situations:
1. States receiving allocations so small as to be
negligible for developing infrastructure (defined as States
whose reported needs are 1 percent or less of the national
total). These States are the first to see their allocations
grow, but by no more than 12 percent in 2005, 16 percent in
2006, 20 percent in 2007, 24 percent in 2008, and 28 percent in
2008 and thereafter.
2. States that have been receiving larger allocations and
whose reported needs continue to grow significantly (defined as
having risen both in dollar terms and as a percentage of the
total need of the nation). Allocations to these States rise by
small amounts which will vary by State.
3. Other States that have been receiving larger allocations
and that, although not reporting significant growth in needs,
are nevertheless large States or those with particular needs to
correct combined sewer overflow problems and non-point source
pollution (defined as States that either report higher needs in
Categories V and VII, or whose population grew 10 percent or
more in the last census, or whose population is at least 4
percent of the national total). Allocations to these States do
not shrink. If annual appropriations grow by $30 million,
reaching $1,380,000,000, then States in situation 3 begin to
share in the nominal growth previously provided only to States
is situation 2.
To resume growth in all allocations as soon as possible and
to maintain the transition to the allocation targets, the
formula changes over time as follows. First, upon publication
of the next Needs Survey, the new needs numbers will become the
basis for the formula - therefore, States that grow
significantly will fare better under the formula. Second, the
limits on growth and loss will fall away when appropriations
reach $3,150,000,000. At this level, the remaining formula will
allocate based entirely on the needs survey with a 1-percent
floor.
Consistent with annual appropriations language, the formula
requires the Administrator to reserve 1.5 percent of the annual
Federal appropriation for the nation's Indian tribes. It also
sets aside 0.25 percent for water quality needs of the U.S.
territories.
Under Section 205(j) of the CWA, the Administrator could
reserve up to 1 percent or $100,000, whichever was greater, of
funds allocated to States under the construction grants program
for water quality management planning. Projects could include
identifying cost-effective and locally acceptable facility and
nonpoint measures to meet water quality standards; developing
an implementation plan for the measures described above;
determining the cause of water quality problems and determining
those POTWs which should be constructed with assistance through
the grants program. This section of the S. 2550 allows the
States to reserve up to 2 percent or $100,000, whichever is
greater to meet the purposes of 205(j) and Section (303)e) of
the CWA. 303(e) outlines the continuing planning process
through which States develop plans for the management of all
navigable waters within the State, including effluent
limitations, Total Maximum Daily Loads, and the inventory and
ranking of needs for construction of POTWs.
Sec. 110. Authorization of appropriations.
Summary
This section authorizes funding of $ 3.2 billion in 2005
and 2006, $3.6 billion in 2007, $4 billion in 2008, and $6
billion in 2009. The EPA is authorized to reserve not more than
$1 million per year to pay the costs of conducting the Clean
Water Needs Survey required by CWA Section 516.
Sec. 111. Reports.
Summary
This section revises the statutory requirement under CWA
Section 516 for State needs surveys from odd-numbered years to
every fourth year.
Discussion
The Clean Water Act requires the EPA to complete the needs
survey every 2 years. The Agency has been conducting the survey
every 4 years.
Sec. 112. Pilot program for alternative water source projects.
Summary
This section extends the authorization from 2005 through
2007 at $25 million per year.
Discussion
The program, created in 2000, authorizes the Administrator
of the Environmental Protection Agency to provide grants to
State, interstate and intrastate water resource development
agencies, local governmental agencies, private utilities and
nonprofit organizations for alternative water resource projects
that address a critical water supply need. The pilot program
was authorized for $75 million for fiscal years 2002 through
2004. It has not received any appropriated funds.
Sec. 113. Wet weather grants.
Summary
This section extends the eligibility for grants to projects
to control stormwater runoff. It extends the authorization from
2005 through 2009 at $250 million per year.
Discussion
Enacted in 2000, CWA Section 221 authorized the Sewer
Overflow Control Grants to assist municipalities meet the costs
of combined (CSOs) and sanitary sewer overflows (SSOs).
According to the 2000 EPA Clean Watersheds Needs Survey, CSOs
and SSOs remain among the largest expenses faced by cities with
costs to correct the overflow often in the billions of dollars.
Funds could be used by a municipality for planning, design and
construction of treatment works to intercept, transport,
control or treat CSOs and SSOs. Section 113 extends eligibility
to projects to comply with Phase I or Phase II of the storm
water regulations (55FR47990 and 64FR235, respectively). The
Federal cost share for eligible projects is limited to 55
percent of the overall project cost.
The program was authorized for $750 million for fiscal
years 2003 and 2004. Funding for the program was contingent
upon appropriations for the Clean Water SRF exceeding $1.35
billion. Because appropriations have remained at this level,
the grants program has not received any appropriated funds.
Sec. 114. Technical correction.
Summary
Makes a technical correction to Section 121.
Discussion
Current law has two sections 121--The Lake Ponchartrain
Basin and the Wet Weather Watershed Pilot Projects. This
section renumbers the Wet Weather section as 122.
Title II--Safe Drinking Water Infrastructure
Sec. 201. Technical assistance for small centers.
Summary
This section reauthorizes $2 million each year for fiscal
years 2005 through 2009 for the Environmental Finance Centers
(SDWA Section 1420(g)).
Discussion
This section provides resources to the Environmental
Finance Centers located at nine universities throughout the
country. The Centers provide financial and technical assistance
to the regulated community. They assist the operators of PWSs
with lowering the costs of compliance, increasing investment in
their systems, encourage full cost pricing of services and
identify financing options. The Centers also provide advice and
recommendations to the EPA on environmental finance issues,
trends and options.
Sec. 202. Labor standards.
Summary
Applies Davis-Bacon Act requirements that laborers and
mechanics be paid at wages not less than the prevailing wage to
all projects financed by the Drinking Water SRF.
Discussion
The Davis Bacon Act of 1931 requires all contracts to which
the United States is a party to require the prevailing wage be
paid to laborers on construction projects. The Act is limited
to contracts directly involving the United States unless
otherwise stipulated.
Section 1450(e) of the Safe Drinking Water Act requires the
Administrator to ``take such action as may be necessary to
assure compliance with [Davis Bacon].'' As enacted, Davis Bacon
applies only to those contracts to which the Administrator or
Federal Government is a contractee. In the case of the SRF, the
contracts are between the State and the municipality and
therefore, Davis Bacon does not apply to the SRF. Section 1452
of SDWA which authorizes the SRF does not include any language
that would apply Davis Bacon to the loans. This section would
expand Davis Bacon to the Drinking Water SRF for the first time
since its creation in 1996.
Sec. 203. Preconstruction work.
Summary
This section modifies the project eligibility list with
several changes.
Section 203(1) clarifies that planning, design, and
associated preconstruction costs are eligible for funds under
the Drinking Water SRF as standalone items.
Section 203(2) states that replacement and rehabilitation
of aging systems, including treatment, storage and distribution
systems are eligible expenses for the fund. This section also
ensures that projects to upgrade the security of a water system
are eligible.
Discussion
By clarifying that preconstruction activities are eligible
for funding, Section 203(1) ensures treatment works are able to
receive financing for engineering costs and other planning
costs that precede actual construction. This provision will
ensure that small communities with few resources available to
develop a project in its early stages can receive assistance
for pre-construction activities.
The Safe Drinking Water Act establishes a priority for
systems to receive funding under the Drinking Water SRF (SDWA
Section 1452(b)(3)) to include projects that address the most
serious risk to human health, are necessary to ensure
compliance, and assist systems most in need on a per household
basis. This section clarifies that replacement and
rehabilitation are also eligible expenses under the Drinking
Water SRF. As Jerry Johnson testified before the Fisheries,
Wildlife and Water Subcommittee on behalf of the nation's
largest water utilities on February 28, 2002, many large
systems biggest expense is replacing old infrastructure and
pipes. The committee, by reiterating their eligibility, seeks
to ensure that once a State has addressed the compliance and
public health threats and helped those systems that are
disadvantaged, they give consideration to helping systems meet
the cost of replacing their aging infrastructure.
After the terrorist attacks of September 11, much attention
is being paid to security at the Nation's water systems. The
Public Health and Bioterrorism Response Act of 2001 (P.L.107-
188) required PWSs to assess their vulnerabilities. Systems are
now in the process of determining what changes need to be made
to their facilities and how to pay for those upgrades. While
EPA currently allows PWSs to use the SRFs for security-related
costs, this provision would state the eligibility in statute,
clarifying that in fact capital costs for security are
eligible. Security costs associated with operations,
maintenance and personnel are not eligible for the SRF.
Sec. 204. Affordability.
Summary
This section allows public water systems to receive funding
assistance for portions of a service area served by the
utility.
Discussion
Many large cities do not qualify as disadvantaged under
their State's definition of the term because they have both
pockets of low-income ratepayers that meet the affordability
criteria and industry and pockets of affluent ratepayers. These
cities have difficulty raising rates because they have many
ratepayers who simply cannot pay more and it is politically
difficult to increase rates on only those with a proven ability
to pay. In order to assist cities struggling to pay for
infrastructure upgrades without imposing too high a burden on
their low-income ratepayers, this provision allows a
municipality to receive negative interest loans or principal
forgiveness if a portion of their service area meets a State
definition of disadvantaged.
Sec. 205. Safe drinking water revolving loan funds.
Summary
Section 205(a) changes the amount of its capitalization
grant a State can reserve for administration of the program
from 4 to 6 percent. Further, under current law, States may set
aside up to 10 percent of the SRF, if the State provides an
equal dollar amount, for public water system supervision
programs, to administer or provide technical assistance for
source water protection programs, to develop and implement
capacity development strategies, and to administer operator
certification programs. This section waves the State match
requirement. Finally, this section permanently extends the
States' authority to transfer up to 33 percent of its Drinking
Water SRF into the Clean Water SRF. The transferred cannot be
used to meet the 20 percent match requirement.
Section 205(b) amends the current requirement that States
establish a priority system under which projects receive
funding for the SRF. This section would require States to
ensure that projects are progressively more likely to receive
assistance by submitting, among other information requested by
the State:
(i) An inventory of assets, including a description of
those assets
(ii) A schedule for replacement of those assets
(iii) A financing plan indicating sources of revenue
(iv) A review of options for restructuring the public water
system
(v) A review of options for approaches other than
traditional approach
This section maintains the SDWA requirement that States
give priority to projects that address the most serious risk to
human health; that are necessary to ensure compliance with the
Act and that assist systems most in need on a per-household
basis according to State affordability criteria. It however
modifies the requirement that States publish ``periodically'' a
summary of the projects eligible for, and receiving, assistance
by requiring the reports at least biennially.
Discussion
Section 205(a) allows States to reserve up to 6 percent of
the SRF for administrative costs. According to the State
drinking water administrators, the cost to administer the
program exceeds the current 4 percent allowable set-aside.\11\
In 1996, Congress created the SRF and gave States the authority
to operate the program. With this new responsibility came new
costs. While the committee does not anticipate that the
requirements in this bill will result in new administrative
burdens to the States, with the intended increase in
appropriations authorized in the bill, it is reasonable to
allow States to reserve a larger, but still small, percentage
of the SRF to meet their administrative costs.
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\11\Association of State Drinking Water Administrators, letter to
the Committee, November 6, 2003.
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Section 205(a) also provides States with more flexibility
by changing one of the cost-share requirements in current law.
States are currently permitted to use 10 percent of their SRFs
for specific set-asides as long as they match that 10 percent.
However, States are also required to first match 20 percent of
the capitalization grant they receive each year from the
Federal Government, essentially requiring a double-match on
these funds from the States. Given the financial constraints
many States are under, few have been able to match the full 10
percent. From 1996 through 2003, States had reserved 4 percent
of their grant with nine States reserving the full amount and
seven reserving none. This section waives the matching
requirement for the 10 percent set-aside.
This section also would make permanent the ability of
States to transfer up to 33 percent of the Drinking Water SRF
into their Clean Water SRF. During a funding cycle, a State may
have a particularly large drinking water or clean water project
for which it needs additional funds. This provision allows them
to transfer some money from one account to the other while
protecting the corpus of the funds. The transferred funds
cannot count toward the State's required 20 percent match of
the Federal grant.
Section 205(b) adds the definition of restructuring and
traditional approach to the statute. As part of its
capitalization agreement with the EPA, each State is required
to develop a priority system which determines the projects a
State will fund each year with its available funds. States must
give priority to those projects which address the most serious
risk to human health, are necessary to ensure compliance, and
assist systems most in need on a per household basis. This
section leaves that requirement in place while also requiring
that States give additional priority points to those projects
who have in place an asset management plan, a capital
replacement plan, a financing plan or have reviewed their
restructuring options and nontraditional approaches.
While many PWSs have a long-term plan for replacement of
their aging assets, many do not. Yet in order to fully
understand the scope of the problem the Nation faces, there
must be an accounting of the health of our utilities. Further,
it makes good business sense to have a full understanding of
the condition of one's assets and how much capital will need to
raised to replace those assets and over what amount of time.
Additional factors States must include in their priority
list include a financing plan indicating how that capital will
be raised including rate increases, grant assistance, bonds or
other loans. PWSs will also receive additional credit if they
have reviewed options for restructuring their water systems. In
some cases, it may be better for a utility to consolidate with
a neighboring one, develop a partnership with the local energy
provider, or consider other cooperative partnerships like
public-private partnerships or privatization. These are all
encompassed in the term restructuring, the goal of which is to
improve upon the management and financial structure of a
utility to ensure it is operating as efficiently and cost-
effectively as possible. PWSs that explore nontraditional
approaches to treatment and source water protection will also
be given additional priority points. These new technologies may
prove to be less expensive than traditional approaches.
Sec. 206. Grants program.
Summary
This section establishes a new provision, 1452(s), that
directs a State to set aside a portion of its SRF for grants to
eligible projects as follows:
(s)(1) Requires a State, in any year in which
appropriations do not exceed $2.5 billion, to set aside 10
percent of its capitalization grant. This provision can be
waived by a State if the average time for processing loan
applications during the last 12 months does not exceed 90 days
(s)(2) Requires a State, in any year in which
appropriations exceed $2.5 billion, to set aside not more than
5 percent nor less than 2.5 percent of its revolving loan fund.
Discussion
By including a grant component within the SRF, this section
seeks to keep the Nation focused on the SRF's as the primary
funding mechanism for drinking water. The committee
acknowledges there is a growing interest in providing PWSs with
grant funds to help meet those costs associated with Federal
regulatory mandates. The daily costs associated with
operations, maintenance and capital improvements due to age
continue to be a local responsibility which the Federal
Government can assist with through the SRF program.
This section would require the States to provide a portion
of their SRFs as a grant to local communities. By maintaining a
single funding source, rather than creating a new, competing
program, the focus remains on the SRF and the need to ensure it
receives adequate funding to meet the needs of local
communities. The small amount of the set-aside, ensures that
the corpus of the fund is protected well into the future by
devoting the vast majority of funds to the loan program.
Further, by incorporating the grant into the SRF, funding for
the grant portion is more likely to be appropriated as the
Drinking Water SRF is a program that regularly receives annual
appropriations. Whereas Congress authorizes grant programs that
do not receive actual appropriations, the SRF annually receives
funding and the linkage to the grant program ensures that the
grants too will receive funding.
Another goal of this section is to provide a quick infusion
of grant funds to communities. The bill allows States to waive
this requirement in (s)(1) if they improve the time it takes
them to process the loan applications, a leading criticism
among applicants for assistance. With the incentive of avoiding
a Federal mandate on the use of their SRF funds, the committee
believes States will have an incentive to increase the speed of
their loan application process.
Sec. 207. Other authorized activities.
Summary
This section permits use of the Drinking Water SRF for
implementation of source water protection plans.
Discussion
The SDWA required States to develop source water protection
plans by May 2003. States were allowed to use up to 15 percent
of their SRF for the development of these plans, as well as
conservation easements, wellhead protection programs, capacity
development programs and implementation of voluntary,
incentive-based source water protection projects. However, no
more than 10 percent of these funds could be used for any one
of the categories listed above. With many State plans
completed, funds are now needed to implement the plans. This
section will allow States to use their SRF funds to implement
their source water protection plans.
Sec. 208. Small system revolving loan funds.
Summary
This section would establish a loan fund to be operated by
a qualified private, nonprofit entity for the purposes of
helping small water systems with predevelopment costs and
short-term costs. This program, in addition to those technical
assistance programs already statutorily provided in the Safe
Drinking Water Act, are authorized at $25 million per year for
fiscal years 2005 to 2009. States shall provide to the EPA an
annual report on the activities supported by this program. Loan
terms cannot exceed 10 years and loans cannot exceed $100,000.
Loan repayments will be credited to the fund maintained by the
qualified nonprofit.
Discussion
The EPA has several existing programs to assist small PWSs,
including an information clearinghouse for technical assistance
providers called Simple Tools for Effective Planning. The
Agency also runs the Small System Technical Assistance Center
Network, a series of technical assistance centers at
universities throughout the Country. The Agency partners with
the National Rural Water Association and the Rural Community
Assistance Partnership to provide technical assistance to PWSs
including how to locate financing for projects and how to run a
water system. Further, the States may reserve up to 2 percent
of their SRF to provide technical assistance to small systems.
Between 1996 and 2003, States had reserved 1.5 percent of their
grants. Twenty-three States reserved the full 2 percent while
two States did not reserve any funds.
The committee however continues to hear of a need for
additional assistance for these small systems.\12\ Many small
PWSs cannot afford the costs associated with planning a
project, including the engineering costs. Without these initial
steps completed, the PWS often has difficulty applying for an
SRF loan to begin construction. The Rural Community Advancement
Program, for example, runs several small SRFs in States to
assist small PWSs with these startup costs, enabling them to
then apply for funds through the State-run SRF for construction
costs. This provision enables the Administrator, with the
Agency's technical assistance funds, to provide money to
nonprofit technical assistance providers to create and run
these smaller SRFs.
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\12\Rural Community Advancement Program, letter to the Committee.
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Sec. 209. Authorization of appropriations.
Summary
This section authorizes funding of $1.5 billion for 2005,
$2 billion for 2006 and 2007, $3.5 billion for 2008, and $6
billion for 2009. The EPA is authorized to withhold not more
than $1 million per year to conduct the drinking water needs
survey required by SDWA Section 1452(h).
Sec. 210. Removal of lead from drinking water in schools and in the
District of Columbia.
Summary
Section 210(a) requires the Administrator to establish a
program to provide grants to States to assist in paying or
reimbursing, costs to local education agencies for remediation
lead contamination in drinking water in schools and informing
parents, students and teachers about lead contamination in
drinking water. It authorizes $40 million each year for fiscal
years 2005 through 2008 and permits the Administrator to
reserve 5 percent to meet administrative expenses. This is
similar to current law Section 1465 which authorized a similar
program that did not receive Federal appropriation funds.
Section 1465 in current law provided funds to assist States
in meeting the requirements of Section 1464 which required
States to establish an assistance program for local education
agencies to test and remediate lead contamination in drinking
water from coolers and other sources in schools. This section
also required that results of testing be available to the
public and that remediation of non lead-free drinking water
coolers in schools within 15 months of October 31, 1998.
However, in Acorn v. Edwards (U.S. 5th Circuit, 1996), the
Court struck down as unconstitutional Sections 1464(d)(1) and
(d)(3) because they violated the 10th Amendment of the
Constitution. The Court ruled ``that section 300j-24(d) [SDWA
Section 1464(d)] is an unconstitutional intrusion upon the
States' sovereign prerogative to legislate as it sees fit.''
While the Court left in tact SDWA Section 1464(d)(2) which
requires that the test results in Section 1464(d)(1) be made
publicly available, because the requirement to test was struck
down, Section 1464(d)(1) was essentially rendered meaningless.
The Court's decision technically applied only to the 5th
Circuit however, it established a precedent that would likely
have been upheld in other circuits. This view was recently
upheld by EPA in a memo to its Regional offices. Therefore, the
committee struck the entire section and instead proceeded with
a voluntary program that protects State sovereignty and
encourages communities to test their schools and make the
results public.
Section 210(b) provides the District of Columbia with $20
million to address lead contamination in its water supply;
activities may include assessment of infrastructure; testing of
water supplies; distribution of filters; evaluation of chemical
additives; pipe replacement and evaluation and improvement of
communication with the public. This section also provides $2
million to the National Academy of Sciences to conduct a phased
study of the lead contamination in drinking water. Phase I will
evaluate compliance of the District of Columbia Water and Sewer
Authority with regulations pertaining to lead and copper in
drinking water and the potential causes of the contamination.
Phase II will assess from a cross-section of cities of varying
population sizes across the country with lead service lines the
extent to which water levels in those cities have exceeded the
action level for lead and the potential causes of the
exceedences.
Discussion
Lead, a known toxin, is used in plumbing fixtures and had
been a primary ingredient in paint and automobile fuel until it
was phased out beginning in the 1970's (The Elimination of Lead
in Gasoline v. M. Thomas).\13\ Great progress has been made in
reducing exposure to lead by phasing out leaded gasoline and
slowly rehabilitating lead-painted homes. However, swallowing
or breathing dust from paint chips is still the leading cause
of lead exposure. Lead water lines still exist in many cities,
including the District of Columbia.
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\13\ Annual Review of Energy and the Environment. 20:301-324,
1995.
---------------------------------------------------------------------------
In 1991, the EPA finalized the lead and copper rule (56 FR
26460), which would minimize lead and copper in drinking water
by reducing corrosivity. Under the rule, the goal for lead in
drinking water is zero parts per billion (ppb). The rule also
established an Action Level, which is a combined measurement of
lead amounts and prevalence at which the PWS is required to act
to reduce the lead. The Action Level is defined as 10 percent
of homes tested exceeding 15 ppb. At this level, the system is
required to increase monitoring and testing, optimize corrosion
control treatment and inform the public about the exceedances.
If the corrosion control treatment does not result in a
decrease in households that exceed the action level, the system
is required to begin replacing lead service lines at a rate of
7 percent per year.
Unlike other contaminants regulated under the Safe Drinking
Water Act, lead is measured inside the residence or business,
not at the treatment plant, because it leaches into the water
from the service lines.
In accordance with the rule, the Washington Aqueduct, owned
and operated by the U.S. Corps of Engineers, installed the
corrosion control treatment in 2000. During the monitoring
period July 2000-June 2001, WASA reported sampling 50 homes.
However in its compliance order, docket No. SDWA-03-2004-0259
DS, EPA found that of those 50 samples, 2 were taken from a
previously sampled location. WASA was required to sample from
50 unique locations during this time. Five of these samples
were taken outside of the required sampling period. EPA also
found that WASA failed to report six samples that were taken.
EPA found that if WASA had included these unreported samples,
WASA would have exceeded the action level of lead in 90th
percentile during July 2000 - June 2001 timeframe.
In August 2002, WASA reported that during the compliance
period July 1,2001 - June 30, 2002, it exceeded the action
level for lead. The lead level in first draw water samples from
the 90th percentile of 53 residences tested was 75 ppb, well
above the action level of 15 ppb. WASA was required to
implement a lead in drinking water public education program,
and to initiate lead service line replacement at a rate of 7
percent per year.
From January 2003 through December 2003, WASA continued to
test homes and continued to exceed the action level. As such,
the Agency was required to continue it public education program
and its lead service line replacement efforts.
EPA included several categories of findings regarding
WASA's compliance with the lead and copper rule in their
consent order which include a failure to take samples within
the monitoring period, a failure to conduct follow-up
monitoring of partially replaced lead service lines and a
failure to comply with requirements for public service
announcements and to use required language in written materials
provided to the public as well as a failure to perform
corrective action. It should be noted that EPA was informed by
WASA of these events and the data and signed off on the public
service announcements.
The EPA consent order requires WASA to take several
corrective actions including:
Plans for updating its lead service line
inventory and reporting to EPA.
Requirement for WASA to strongly encourage full
replacement of lead service lines with owners paying for their
portion, including submission of a plan to EPA for encouraging
homeowners to agree to full replacement.
Requirement for WASA to develop and submit a
public education plan including public health issues, steps to
reduce health risks and steps to address EPA recommendations on
effectiveness of prior public education.
Requirement for WASA to document to EPA that they
have provided water filers to all customers suspected or known
to have lead contamination at no charge as well as those with
unknown service line materials.
Requirement for WASA to submit detailed sampling
plans to EPA.
On August 23, 2004, WASA began adding orthopohsophate to
the drinking water supply through the city to reduce the
corrosivity of the water supply in an effort to reduce lead
levels. EPA estimates that it will take 6 months to detect a
reduction in lead levels.
One of the leading complaints against WASA throughout this
period is that the agency failed to communicate effectively
with the public about how many homes had exceeded the action
level (and by how much) and what residents should do to protect
themselves. On February 27, 2004, D.C. Mayor Anthony Williams
and Councilmember Carol Schwartz notified Chairman Inhofe by
letter that they had ``established the Interagency Task Force
on Lead in Drinking Water [which] has been meeting weekly to
look into ways [to, in addition to other actions,] identify
funding sources to help pay for [lead pipe] replacements and
make certain [the District of Columbia Water and Sewer
Authority] and the D.C. Department of Health communicate
critical information to citizens promptly and clearly.'' In
testimony before the Subcommittee on Fisheries, Wildlife and
Water subcommittee on April 7, 2004, the Director of EPA's
Region III, Donald Walsh, stated, ``public education efforts
were ineffective, and we believe, not fully compliant in all
instances with EPA rules.'' Additional testimony from a risk
management expert and D.C. residents corroborated the view that
public notification and education efforts were ineffective.
To speed the corrective efforts of EPA, Mayor Williams, the
Council of the District of Columbia, and the D.C. Water and
Sewer Authority, the committee believes additional assistance
and scrutiny must be provided to the city as well as nation's
schools. Therefore, this section would authorize the National
Academy of Sciences to conduct a study, first of the situation
in D.C. to determine the exact cause of the problem. The
Academy is then to assess the situation in other cities with
lead service lines to determine if they too have encountered
elevated lead levels in their drinking water. Congress and the
EPA must fully understand the scope and the cost of the problem
before proposing changes that will affect all cities and that -
though well-intentioned - may fail to address the problems in
D.C.
The outrage of residents in D.C. about inadequate and
misleading information about a known risk in their drinking
water has motivated the committee to authorize a $20 million
grant to the District of Columbia to take whatever actions are
needed to mitigate the problem, including assess its
infrastructure, test water supplies, distribute filters,
evaluate chemical additives, replace pipes and evaluate and
improve communication with the public.
Finally, concerns remain about the safety of drinking water
in D.C. schools. Similarly, there may be lead service lines and
lead in drinking water coolers in other schools throughout the
country. EPA recommends that school districts test for lead in
their drinking water to ensure that it is safe for consumption.
The individual school buildings may still have too much lead in
the drinking water because of lead water fixtures. As such, the
bill would provide funds to schools to reimburse them for costs
associated with testing their water, removing water coolers and
disseminating information, including test results, to the
school community.
Sec. 211. Small public water system assistance program.
Summary
This section establishes a new program under the Safe
Drinking Water Act to assist PWSs and Indian Tribes with
meeting the costs of drinking water regulations.
Section 1471 establishes a definition for an eligible
activity as an activity, including source water protection
projects, carried out by an eligible entity to ensure
compliance with a national primary drinking water regulation.
It cannot include any activity to increase the population
served by a public water system unless the project is necessary
to achieve compliance or provide an unserved population with a
safe water supply.
Section 1471 also defines an eligible entity as a small
public water system or Tribe that serves a community that is
disadvantaged, as determined by the State, or may become
disadvantaged as a result of a project; or a public water
system that will incur $3 million or more in compliance costs.
It also defines a small public water system as one serving less
than 15,000.
Section 1472(a) establishes a program within EPA to assist
small public water systems in carrying out eligible activities.
Section 1472(b) requires that priority be given to those
projects that address the most serious risks to human health
from lack of compliance with national primary drinking water
regulations; are necessary to ensure compliance with national
primary drinking water regulations or assist systems serving
communities that are most in need based on affordability
criteria established by the State.
Section 1472(c) also authorizes the Administrator to use
not less than 1.5 percent of the funds made available under
this Title for grants to technical assistance providers to help
eligible entities assess their needs, identify additional
funding sources and plan, implement and maintain and eligible
activity. Eligible entities are limited to using not more than
5 percent of the funds received under this Title for technical
assistance.
Section 1472(d) further requires the Administrator to
reserve not less than 3 percent of funds for projects by Indian
Tribes. The same eligibilities and limitations apply to
projects carried out by Tribes. Specific program priority
requirements are provided for Tribes.
Section 1472(e) limits funds to those projects which will
aid in compliance with the Act, those that restructure or
consolidate facilities to achieve compliance or in cases where
restructuring and consolidation are not practicable, if the
Administrator determines that the system has made a good faith
effort to comply with and will adhere to an enforceable
schedule to comply; or if the Administrator determines that the
system lacks the technical, financial and managerial capacity
to ensure compliance.
Section 1472(f) limits the Federal share of any project to
80 percent of the cost of the project. The Administrator may
waive the cost-share in some circumstances.
Section 1472(g) requires that one year after disbursement,
any unused grants be returned to the Administrator for
distribution to other recipients.
Section 1473 requires the Administrator to submit a report
to the Committee on Environment and Public Works and the
Committee on Energy and Commerce that lists the activities
being carried out with the grants; the number of grants and the
location of the recipient; each eligible entity that receives a
grant; the amount of each grant and description of activity
funded.
Section 1474 authorizes $200 million per year for fiscal
years 2005 through 2008.
Discussion
While the infrastructure gap is affecting communities of
all sizes in all parts of the country, the struggle to meet
rising costs is particularly difficult for small communities.
As Elmer Ronnebaum, the General Manager of Kansas Rural Water,
testified on February 26, 2002 before the Committee on
Environment and Public Works,
``Many of the regulations will force small towns to come up
with millions in financing - many systems will be stressed to
comply. I think it is significant to observe a new dynamic in
EPA regulations: the regulation of naturally occurring
contaminants and the regulations of operations and maintenance
in utilities. The result of this new effort by EPA will be to
greatly expand the number of systems forced into costly
compliance with EPA rules. For example, very few systems were
required to treat for EPA's previous rules on organic
contaminants, many with anthropogenic origins. However, the
forthcoming arsenic rule could capture as many as 4,000
communities; this will greatly drive the demand for additional
funding resources. Upcoming EPA rules that may be expensive in
thousands of rural communities include: standards for
certification of operators, filter backwash, radon, surface
water treatment rules, arsenic, disinfection byproducts, ground
water disinfection, etc.''
This section of S. 2550 seeks to help communities address
costs due to compliance with the Safe Drinking Water Act.
Systems are faced with complying with several rules over the
next few years, including the new standard for arsenic (66 FR
6975). According to EPA's cost estimate, small systems could
see an increase of up to $327 per year. If the city is one like
Wewoka, Oklahoma that is home to 3,700 residents, 20 percent of
whom are unemployed, a $327 increase in water fees is
exorbitant.\14\ Communities are also struggling to comply with
the Long Term 1 Enhanced Surface Water Treatment Rule (67 FR
1811) and for those systems that chemically treat their water,
the Stage 1 Disinfectants and Disinfection Byproducts Rule (63
FR 69389).
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\14\U.S. Congress. Committee on Environment and Public Works. The
Cost to Local Governments to Implement the Clean Water Act and the Safe
Drinking Water Act. Hearing. 108th Congress, 2nd session, July 26,
2002. Rick Bourgue, City Manager, City of Wewoka, OK.
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This section of the bill seeks to help these systems meet
the costs associated with these and other drinking water
regulations. It would provide grants to small systems and
Tribes to assist them in coming into compliance with the
statute. Those systems who are not in compliance, face a public
health threat or are disadvantaged are to receive priority
consideration. Funds are limited to those projects which will
aid in compliance with the Act. It is unlikely that sufficient
funding will be provided to this program to give every system
eligible for funds enough money to fully comply with the Act.
However, funds may be made available that will move some
systems much closer to compliance than if they had not received
any Federal funding.
The system should consider restructuring and consolidation
to come into compliance. If these options are not practicable,
and the system is not in compliance with the Act, the system
must have made a good faith effort to comply and will adhere to
an enforceable schedule to comply. Funds can also be used to
assist those systems that lack the technical, financial and
managerial capacity to ensure compliance.
Sec. 212. Small public water system assistance program.
Summary
This section establishes a new program under the Safe
Drinking Water Act to assist PWSs and Indian Tribes with
meeting the costs of drinking water regulations.
Section 1471 establishes a definition for an eligible
activity as an activity, including source water protection
projects, carried out by an eligible entity to ensure
compliance with a national primary drinking water regulation.
It cannot include any activity to increase the population
served by a public water system unless the project is necessary
to achieve compliance or provide an unserved population with a
water supply.
Section 1471 also defines an eligible entity as a small
public water system or Tribe that serves a community that is
disadvantaged, as determined by the State, or may become
disadvantaged as a result of a project; or a public water
system that will incur $3 million or more in compliance costs.
It also defines a small public water system as one serving less
than 15,000.
Section 1472(a) establishes a program within EPA to assist
small public water systems in carrying out eligible activities.
Section 1472(b) requires that priority be given to those
projects that address the most serious risks to human health
from lack of compliance with national primary drinking water
regulations; are necessary to ensure compliance with national
primary drinking water regulations or assist systems serving
communities that are most in need based on affordability
criteria established by the State.
Section 1472(c) also authorizes the Administrator to use
not less than 1.5 percent of the funds made available under
this Title for grants to technical assistance providers to help
eligible entities assess their needs, to identify additional
funding sources and plan, implement and maintain and eligible
activity. Eligible entities are limited to using not more than
5 percent of the funds received under this Title for technical
assistance.
Section 1472(d) further requires the Administrator to
reserve not less than 3 percent of funds for projects by Indian
Tribes. The same eligibilities and limitations apply to
projects carried out by Tribes. Specific program priority
requirements are provide for the tribes.
Section 1472(e) limits funds to those projects which will
ensure compliance with the Act, those to restructure or
consolidate facilities to achieve compliance or in cases where
restructuring and consolidation are not practicable, if the
Administrator determines that the system has made a good faith
effort to comply and will adhere to an enforceable schedule to
comply; or if the Administrator determines that the system
lacks the technical, financial and managerial capacity to
ensure compliance.
Section 1472(f) limits the Federal share of any project to
80 percent of the cost of the project. The Administrator may
waive the cost-share in some circumstances.
Section 1472(g) requires that one year after disbursement,
any unused grants be returned to the Administrator for
distribution to other recipients.
Section 1473 requires the Administrator to submit a report
to the Committee on Environment and Public Works and the
Committee on Energy and Commerce that lists the activities
being carried out with the grants; the number of grants and the
location of the recipient; each eligible entity that receives a
grant; the amount of each grant and describes the activity
funded.
Section 1474 authorizes $1 billion per year for 2005
through 2008.
Discussion
This section is fundamentally the same as the preceding
section with two exceptions. This section limits funding to
those systems for whom the money will ensure, instead of aid,
compliance. It further authorizes $1 billion a year instead of
$200 million a year.
Title III--Miscellaneous
Sec. 301. Definition of Administrator.
Summary
This section clarifies that references to the
``Administrator'' are to the Administrator of the Environmental
Protection Agency.
Sec. 302. Demonstration grant program for water quality enhancement and
management.
Summary
Section 302(a) establishes a nationwide demonstration grant
program within EPA to promote innovations in technology and
alternative approaches to water quality management as well as
reduce costs to municipalities incurred in complying with the
CWA and the SDWA.
Section 302(b) requires municipal applicants to submit to
the Administrator a plan that is developed in coordination with
the State in which the municipality is located and interested
stakeholders. It further requires the applicant to describe the
water impacts it seeks to address, include a strategy to
address the water quality program and achieve the same goals
that could be achieved using more traditional methods or those
required by the CWA and the SDWA and include a schedule for
achieving the goals.
Section 302(b) further defines the types of projects that
are eligible to include those that address excessive nutrient
growth; urban or rural population pressures; lack of an
alternative water supply; difficulty in water conservation and
efficiency; lack of support tools and technologies; lack of
monitoring or data analysis; nonpoint source water pollution;
sanitary and combined sewer overflows; problems with naturally
occurring constituents of concern; problems with erosion or
excess sediment; new approaches to water treatment,
distribution and collection and new methods for collecting and
treating wastewater.
The Administrator much ensure, to the maximum extent
practicable, that the projects are diverse geographically, in
terms of the technologies tested and the nontraditional
approaches used and that each category of projects described
above is adequately represented. Higher priority should be
given to projects that address multiple problems and are
regionally applicable.
The Administrator must ensure, to the maximum extent
practicable, that at least one community serving less than
10,000 receives a grant each year and that no municipality
receives more than 25 percent of the funds.
This section also limits the Federal cost share to 80
percent which the Administrator may waive for affordability
reasons.
Section 302(c) requires each grant recipient to report to
the Administrator on the progress of the project after one, two
and 3 years. The Administrator must report to Congress 2 years
after enactment on the results of the demonstration program.
Section 302(d) requires the Administrator, to the maximum
extent practicable, to incorporate the results of the projects
into programs administered by the Administrator.
Section 302(e) authorizes the Administrator to award grants
and enter into cooperative agreements with research
institutions, educational institutions and other appropriate
entities for research and development on the use of innovative
and alternative technologies to improve water quality or
drinking water supply. Eligible projects include those to
increase the effectiveness and efficiency of public water
supply systems; to encourage the use of innovative or
alternative technologies or approaches related to water supply
or availability; and to increase the effectiveness and
efficiency of treatment works.
This section authorizes $20 million per year from fiscal
year 2005 through fiscal year 2009 to carry out this Title.
Section 302(f) authorizes $20 million for each year from
fiscal year 2005 through fiscal year 2009 to carry out Section
302 except (e).
Discussion
One important aspect of reducing the infrastructure
financing gap is finding more affordable alternatives for POTWs
and PWSs. As the Deputy Assistant Administrator from EPA's
Office of Water testified before the committee on February 26,
2002:
``This strategy to renew our water and wastewater
infrastructure . . . puts a high premium on optimizing the
efficient use of our current capital assets and the new
investments we must make. That will require the use of
innovative technologies for improved services at lower life-
cycle costs, which in turn means supporting research and
development on these innovative technologies.''
To further encourage research into innovative technologies,
Section 302 establishes in the EPA both a research and
development program and a demonstration grant program. The
research program is aimed at increasing the effectiveness and
efficiency of public water supply systems, encouraging the use
of innovative or alternative approaches to water supply or
availability and increasing the effectiveness of the treatment
works. It is authorized at $20 million per year from fiscal
year 2005 through fiscal year 2009.
The demonstration grant program targets water quality
management and enhancement. It requires at least a 20 percent
non-Federal cost share for projects. The program will promote
innovations in technology and alternative approaches to water
quality management and supply, with the goal of reducing
municipal costs of complying with the Clean Water Act and the
Safe Drinking Water Act. Municipalities selected for programs
must describe a strategy by which the demonstration grants
could achieve similar results as those mandated by the two
statutes or those that could be achieved by traditional water
quality methods. Grant recipients must submit annual reports to
EPA which must submit a report to Congress. The Administrator
must ensure to the maximum extent practicable that innovative
technologies, geographic distribution, and non-traditional
approaches are represented.
The National League of Cities, the Conference of Mayors,
and the American Metropolitan Sewerage Association (AMSA)
testified in favor of demonstration grant program at a February
2002 hearing. AMSA testified that such a program is ``vitally
important.''
Sec. 303. Cost of service study.
Summary
This section requires the National Academy of Sciences
(NAS) to identify existing standards for affordability;
determine the manner in which those standards are determined;
determine how affordability differs depending on community size
and location and study the extent to which affordability
affects the decision of a utility to increase rates. This
section also requires the NAS to evaluate the factors and
characteristics that are required for a community to be
considered disadvantaged.
Discussion
Small and disadvantaged communities often struggle to meet
regulatory costs as well as to maintain their POTWs and PWSs.
Whether a community receives additional financial assistance in
meeting their obligations often depends on how States define
disadvantaged. Further, how the EPA, the States and the
communities themselves define affordable has a direct impact on
whether the community as a whole and individual ratepayers
receive additional financial assistance.
Sec. 304. State revolving fund review process.
Summary
This section requires the Administrator to consult with
States, other Federal agencies, and utilities to identify ways
to expedite and improve the application and review process for
the SRFs and take such administrative action as authorized
under existing law to achieve that goal. The Administrator
shall provide to Congress a report that contains
recommendations for legislation to further improve the
processes.
Discussion
While each State is required to comply with several Federal
requirements, each also imposes many of its own. This provision
requires the Administrator to work with States and other
agencies to develop recommendations for streamlining the
application process and lessening the amount of time it takes
to receive funds. One of the goals of the Water Infrastructure
Financing Act is make the SRF more user-friendly. This study is
one step in that effort.
Sec. 305. Southeast Colorado safe drinking water supply.
Summary
Section 305 authorizes $85 million for the Southeast
Colorado Water Activity Enterprise to assist communities in
Pueblo and Prowers Counties, Colorado to construct a water
transmission line from the Pueblo Reservoir to the city of
Lamar, Colorado.
Discussion
The Arkansas Valley Conduit originally received
congressional authorization in the 1960's as part of the
Fryingpan-Arkansas Project to provide abundant, clean water to
the people of Southeast Colorado. At the time of authorization,
the Federal Government had already deemed the Arkansas River as
unacceptable for drinking water purposes, yet forty years have
passed without construction. Recent drought conditions have
worsened the quality and created water shortages along the
river. Selenium and other contaminants coupled with the drought
have seriously imperiled Southeast Colorado's drinking water
supplies, leaving expensive and inefficient treatment processes
as the only option. Feasibility reports have shown that
Southeast Colorado lacks the ability to pay for such treatment
facilities and therefore must rely on Federal assistance. The
studies have shown that the Conduit is a viable solution to the
drinking water situation. This section provides funding to the
communities to construct the conduit. The committee expects
other funding sources will be needed to complete the project.
While the committee historically does not fund individual water
projects, because the Department of Interior failed to follow
through on construction of the project, already authorized by
Congress, the committee believes this is an appropriate project
to reiterate congressional support for by providing an
additional authorization.
Sec. 306. Assessment of perchlorate contamination.
Summary
Requires the U.S. Geological Survey to conduct a nationwide
assessment of sites contaminated with perchlorate and the
geological conditions of those sites.
Discussion
Perchlorate is both naturally occurring and man made. While
the majority of perchlorate manufactured in the U.S. is used as
solid rocket fuel, perchlorate is also used in such widely
distributed consumer products as fireworks, road flares, and
automobile airbags. In addition, prior to the development of
more modern drugs, perchlorate was used as a drug to treat
thyroid disorders such as Graves disease. Perchlorate is still
approved by the FDA as a drug and is administered in
conjunction with certain medical imaging techniques. Because of
such widespread use perchlorate has been discovered in both
soil and water samples. In 1998, perchlorate was placed on the
EPA's Contaminant Candidate List. Those substances placed on
the list are then considered for regulation. However, the EPA
concluded that it could not regulate the contaminant at that
time because the Agency lacked both a risk assessment and
occurrence data.
In 1999, as part of the Unregulated Contaminant Monitoring
Rule, all large PWSs were to monitor for perchlorate over the
subsequent 2-year period to determine if large amounts of the
public were being exposed to perchlorate in their drinking
water. The results of the monitoring of treated drinking water,
not source water, found that 2 percent of the 26,000 results
showed detectable levels of perchlorate.
The EPA also initiated a risk assessment for perchlorate.
Currently, there is not a scientific consensus on what level of
perchlorate must be consumed to create an adverse health
effect. Because of the lack of consensus, in March 2003, EPA
and the Department of Defense requested the National Academy of
Sciences advise EPA on questions related to its draft
perchlorate risk assessment. The NAS' assessment of EPA's
report is due in January 2005. The fiscal year 2004 Department
of Defense Authorization Act required the Agency to have an
independent epidemiological study and endocrinological review
of human exposure to perchlorate in drinking water.
Section 306 requires the U.S. Geological Survey to conduct
an assessment of sites contaminated by perchlorate to provide
data on the extent of water contamination.
Sec. 307. National estuary program.
Summary
Reauthorizes the National Estuary Program at $35 million
for an additional 5 years through 2010.
Discussion
In 1987, Congress established the National Estuary Program
(NEP) by adding Section 320 to the Clean Water Act. The goal of
Section 320 is the promotion of comprehensive conservation and
management plans (CCMPs) for estuaries of national significance
through the collaborative voluntary efforts of Federal, State,
local, non-profit and private interests. Today, the NEP
includes 28 estuaries in 18 States and Puerto Rico. All 28
estuary programs are in the process of implementing their
CCMPs. The NEP is currently authorized at $35 million annually
through fiscal year 2005. This legislation would reauthorize
the NEP at $35 million annually through FY2010.
Sec. 308. Sewage control technology grant program.
Summary
Adds a new section to the Federal Water Pollution Control
Act in which $100 million is authorized for 2005 through 2009
to provide grants to POTWs in the Chesapeake Bay Watershed that
treat at least 500,000 gallons of wastewater per day and
install technologies that are designed to reduce total nitrogen
in discharged wastewater to an average annual concentration of
5 milligrams per liter.
Discussion
Excessive nutrients, including nitrogen, remain one of the
most serious pollution problems facing the Chesapeake Bay. The
overabundance of nitrogen and phosphorous deplete the oxygen
levels in the Bay, causing a condition known as hypoxia. Sea
life virtually disappears in hypoxic water. Recent modeling of
EPA's Bay Program has found that nutrient discharges must be
reduced by more than 35 percent in order to fully restore the
Bay. Sources that must reduce their nitrogen outputs include
municipal wastewater treatment plants.
There are 304 major wastewater treatment plants in the
Chesapeake Bay watershed: Pennsylvania, 123, Maryland, 65,
Virginia, 86, New York, 18, Delaware, 3, Washington, DC, 1, and
West Virginia, 8. These plants contribute about 60 million
pounds of nitrogen per year - one-fifth - of the total load of
nitrogen to the Bay. Given the large amount of nitrogen being
released from POTWs, one way to effectively address this
problem is to upgrade these plants to remove more nitrogen from
their effluent. The average secondary treatment plant discharge
contains 12-16 milligrams of nitrogen per liter; some
techniques, such as biological nutrient removal can cut this
nitrogen discharge level by over half. Upgrading these plants
with nutrient removal technologies to achieve nitrogen
reductions of 3 mg/liter would remove 46 million pounds of
nitrogen in the Bay each year or 40 percent of the total
nitrogen reductions needed.
Sec. 309. Special water resources study.
Summary
Section 309(a) adds the Secretary of Homeland Security to
the Water Resources Council.
Section 309(b) authorizes the Water Resources Council to
carry out a study of water management programs used by all
levels of government and the private sector to increase water
supplies and improve availability; consult with agencies and
entities to develop recommendations for a comprehensive water
strategy. The water strategy must:
(i) Respect the primary role of States in regulating water
rights and uses,
(ii) Identify incentives to ensure an adequate and
dependable supply of water through 2054,
(iii) Suggest strategies to avoid increased mandates on
State and local governments,
(iv) Eliminate duplication and conflict among Federal
programs,
(v) Considers all available technologies and methods to
optimize water supply reliability, availability, and quality,
(vi) Recommends means of capturing excess water and flood
water for conservation and use in drought,
(vii) Suggests financing options for supply and public
works projects,
(viii) Suggests strategies to conserve existing water
supplies, including repairing aging infrastructure,
(ix) Includes other objectives relating to the effective
management of water supply to ensure reliability, availability
and quality.
This section further requires the Council to evaluate
Federal water programs in existence on the date of enactment
and submit to Congress and the President recommendations to
eliminate discrepancies and duplication and any other
circumstances that interfere with the effective operation of
the programs. The Council also must develop and make publicly
available water planning models.
The Council is required to develop and coordinate public
awareness activities to provide the public with access to
understandable information on water supply, reuse and
conservation. The Council must consult with interested groups
including those representing the agriculture, fisheries and
forestry industries, fire management interests, rural and urban
water associations, environmental interests, engineering and
construction interests, the scientific community that is
concerned with climatology and hydrology, resource dependent
businesses and any other group the Council considers necessary.
The Council is required to submit reports every 180 days
after the Council's first meeting to the President and relevant
congressional committees. A final report must be submitted no
later than 3 years after the first meeting of the Council which
details the Council's findings and conclusions, recommendations
for legislation and other policies. Section 309(c) authorizes
$9 million for 2005 to be used until expended.
Discussion
Water supply is growing concern not only in the western
United States, which is commonly associated with water
shortages and fights, but also in the eastern United States
which recently suffered from a long drought. While water supply
is and should continue to be a State governed issue, there are
several Federal programs that address the issue of supply.
Better coordination of these programs may be necessary.
Further, the Federal Government may be able to provide useful
resources, information and tools to the States while respecting
their primacy over the issue.
The U.S. Water Resources Council, established by the Water
Resources Planning Act of 1965, had been responsible for
studying the nation's water and related land resources. It
prepared periodic assessments to determine whether these
resources were adequate to meet national water requirements and
developed important economic and environmental criteria for
water projects - known as the Principles and Guidelines - that
are still used by Federal water resource planning agencies.
Under President Carter, it was suggested that the WRC's role be
expanded to include greater regulatory authority and stronger
review of water projects. This proved very unpopular with many
stakeholders and the Council was eliminated.
This section would reauthorize the Council to develop
recommendations for a comprehensive water strategy which must
respect the rights of States, avoid mandates on local and State
governments while suggesting options for addressing water
shortages, means of capturing excess water and financing water
projects. The Council is also charged with assessing current
data and making recommendations about duplication among the
Federal agencies with a role in water supply. The Council is
charged with developing and making publicly available water
planning models and initiating a public information campaign on
water reuse and conservation.
Legislative History
On June 21, 2004, Senator Crapo, for himself, Senator
Inhofe and Senator Murkowski, introduced the Water
Infrastructure Financing Act (S. 2550). The bill was read twice
and referred to the Committee on Environment and Public Works.
The committee met on June 23, 2004 to consider the bill. The
bill, as amended, was ordered reported on June 23, 2004.
Hearings
The committee has been working on legislation to
reauthorize the two SRFs and provide additional resources to
communities throughout the 107th and 108th Congresses. The
Subcommittee on Fisheries, Wildlife, and Water held four
hearings related to clean water and drinking water programs and
one legislative hearing on S. 1961. The full committee held one
legislative hearing on S. 1961.
On March 27, 2001, The Subcommittee on Fisheries, Wildlife,
and Water held a hearing on water and wastewater infrastructure
needs. Testimony was received from Hon. Christine Todd Whitman,
Administrator, Environmental Protection Agency; Mr. Jon
Sandoval, Chief of Staff, Idaho Department of Environmental
Quality, Boise, ID; Mr. David Struhs, Secretary, Florida
Department of Environmental Protection, Tallahassee, FL; Mr.
Harry Stewart, Director, Water Division, New Hampshire
Department of Environmental Services, Concord, NH; and Mr.
Allen Biaggi, Administrator, Nevada Department of Conservation
and Natural Resources, Division of Environmental Protection,
Carson City, NV.
On April 30, 2001 in Columbus, Ohio, the Subcommittee
Fisheries, Wildlife, and Water held a field hearing, focusing
on the types of water infrastructure challenges facing local
communities in that region. Testimony was received from Hon.
Lydia Reid, Mayor of Mansfield, OH; Hon. Robert Vicenzo, Mayor
of St. Clairsville, OH; Mr. Christopher Jones, Director, Ohio
Environmental Protection Agency; Columbus, OH; Mr. Erwin Odeal,
Executive Director, Northeast Ohio Regional Sewer District,
Cleveland, OH; Mr. Robert Stevenson, Commissioner, Department
of Public Utilities, Division of Water/Wastewater, Toledo, OH;
Mr. Patrick T. Karney, P.E., Director, Metropolitan Sewer
District of Greater Cincinnati, Cincinnati, OH; and Mr. Patrick
Gsellman, Environmental Supervisor, Bureau of Engineering,
Akron, OH.
On October 31, 2001, the Subcommittee on Fisheries,
Wildlife, and Water held an oversight hearing on innovative
financing techniques for water infrastructure improvements.
Testimony was received by Mr. G. Tracy Mehan III, Assistant
Administrator, Office of Water, Environmental Protection
Agency; Mr. Stephen E. Howard, Senior Vice President, Lehman
Brothers; Mr. Rick Farrell, Executive Director, Council of
Infrastructure Financing Authorities; Mr. Peter L. Cook,
Executive Director, National Association of Water Companies;
Mr. Harold J. Gorman, Executive Director, New Orleans Sewage
and Water Board, on behalf of the Association of Metropolitan
Water Agencies; and Mr. Paul Pinault, Executive Director,
Narragansett Bay Commission, on behalf of the Association of
Metropolitan Sewerage Agencies.
On November 14, 2001, the Subcommittee on Fisheries,
Wildlife, and Water held a hearing on water supply. Testimony
was received from Hon. Mike Parker, Assistant Secretary of the
Army for Civil Works; Mr. John Keys, Commissioner for the
Bureau of Reclamation, Department of the Interior; Mr. Tom
Weber, Deputy Chief of Programs, Resources Conservation
Service, Department of Agriculture; Ms. Ane Diester, Associate
Vice President, Metropolitan Water District of Southern
California, testifying as the non-Federal Chair of the National
Drought Council; Mr. Jay Rutherford, Director, Water Supply
Division, Vermont Department of Environmental Conservation, on
behalf of the Association of State Drinking Water
Administrators; Mr. Ken Frederick, Senior Fellow, Resources for
the Future; and Mr. Leland `Roy' Mink, Director, Idaho Water
Resources Research Institute.
On February 26, 2002, the Committee on Environment and
Public Works held the first legislative hearing on S. 1961 and
other water infrastructure related bills. Testimony was
received from Senator Jon Kyl; Mr. Ben Grumbles, Deputy
Assistant Administrator for Water, Environmental Protection
Agency; Hon. Douglas H. Palmer, Mayor of Trenton, NJ and
chairman of the Urban Water Council of the Conference of
Mayors; Hon. Joseph A. Moore, Alderman of the city of Chicago,
on behalf of the League of Cities; Ms. Nancy Stoner, Director,
Clean Water Project, Natural Resources Defense Council; Mr.
Paul Schwartz, National Policy Director, Clean Water Action;
Mr. Bill Kukurin Associated Builders and Contractors; Mr. Jim
Barron, President, Ronkin Construction, on behalf of the
National Utility Contractors Association; Mr. Terry Yellig,
Building Trades Attorney, Sherman, Dunn, Cohen, Leifer &
Yellig, on behalf of the International Union of Operating
Engineers.
On February 28, 2002, the Subcommittee on Fisheries,
Wildlife, and Water held the second legislative hearing on S.
1961 and other water infrastructure related bills. Testimony
was received from Senator Paul S. Sarbanes; Mr. Robert Hirsch,
Associate Director of Water, U.S. Geological Survey; Mr. Andrew
M. Chapman, President, Elizabethtown Water Company, on behalf
of the National Association of Water Companies; Mr. Ed
Archuleta, General Manager, El Paso Water Utilities, on behalf
of the Association of the Metropolitan Water Agencies; Mr. Paul
Pinault, Executive Director, Narragansett Bay Commission on
behalf of the Association of Metropolitan Sewerage Agencies;
Mr. Elmer Ronnebaum, General Manager, Kansas Rural Water
Association, on behalf of the National Rural Water Association;
Mr. Howard Neukrug, Director, Office of Watershed of the
Philadelphia Water Department, on behalf of the American Water
Works Association; Mr. Tom Morrissey, President, Association of
State and Interstate Water Pollution Control Administrators;
and Mr. Jay L. Rutherford, P.E., Director, Water Supply
Division for the Vermont Department of Environmental
Conservation, on behalf of the Association of State Drinking
Water Administrators.
On February 15, 2002, Senators Graham, Crapo, Jeffords and
Smith introduced S. 1961, the Water Investment Act of 2002. The
committee reported the bill on May 17, 2002 by a vote of 13 to
6.
On June 21, 2004, Senators Crapo, Inhofe and Murkowski
introduced S. 2550, the Water Infrastructure Investment Act of
2004.
Roll Call Votes
The Committee on Environment and Public Works met to
consider S. 2550 on June 23, 2004. A manager's amendment
offered by Senators Inhofe and Crapo was agreed to by voice
vote.
An amendment filed by Senator Jeffords was accepted by
unanimous consent. The Amendment makes technical changes to the
projects eligible for assistance.
An amendment filed by Senator Voinovich was accepted by
unanimous consent. The amendment requires the States to use 2
percent of their Clean Water SRF for water quality management
planning.
An amendment filed by Senator Jeffords was accepted by
unanimous consent. The amendment allows States to use SRF funds
to provide grants to local watershed groups to capitalize local
revolving loan funds to provide resources to nontraditional
projects.
A substitute amendment offered by Senator Jeffords was
defeated by rollcall with 9 ayes and 10 nays. Senators
Jeffords, Baucus, Reid, Graham, Leiberman, Boxer, Wyden, Carper
and Clinton voted for the amendment. Senators Inhofe, Warner,
Bond, Voinovich, Crapo, Chafee, Cornyn, Murkowski, Thomas and
Allard voted against the amendment.
An amendment offered by Senator Jeffords to authorize a
program to address lead in drinking water was defeated by roll
call vote with 9 ayes and 10 nays. Senators Jeffords, Baucus,
Reid, Graham, Leiberman, Boxer, Wyden, Carper and Clinton voted
for the amendment. Senators Inhofe, Warner, Bond, Voinovich,
Crapo, Chafee, Cornyn, Murkowski, Thomas and Allard voted
against the amendment.
A Bond second degree amendment to the Jeffords amendment
which would have required EPA, before reducing the acceptable
level of lead in fixtures to .2 percent as directed in the
Jeffords' amendment to ensure there would not be a loss of jobs
in the brass and cooper fixture industry was defeated by voice
vote.
An amendment offered by Senator Crapo to authorize funds
for the District of Columbia to address lead in its drinking
water; authorize a study by the National Academy of Sciences
into the D.C. lead situation and to determine if a nationwide
problem exists and to provide funds to mitigate lead in
drinking water in the nation's schools passed by roll call with
13 ayes and 6 nays. Senators Allard, Bond, Carper, Chafee,
Cornyn, Crapo, Graham, Murkowski, Reid, Thomas, Voinovich,
Warner and Inhofe voted for the amendment. Senators Baucus,
Boxer, Clinton Lieberman, Wyden, and Jeffords voted against the
amendment.
An amendment offered by Senator Jeffords to require States
to look at local development plans as part of their continuing
planning process outlined section 303(e) of the CWA was
defeated by roll call vote with 9 ayes and 10 nays. Senators
Jeffords, Baucus, Reid, Graham, Leiberman, Boxer, Wyden, Carper
and Clinton voted for the amendment. Senators Inhofe, Warner,
Bond, Voinovich, Crapo, Chafee, Cornyn, Murkowski, Thomas and
Allard voted against the amendment.
An amendment offered by Senator Boxer to require the United
States Geological Survey to conduct an assessment of sites
contaminated by perchlorate was agreed to by rollcall with 10
ayes and 9 nays. Senators Jeffords, Baucus, Reid, Graham,
Leiberman, Boxer, Bond, Wyden, Carper and Clinton voted for the
amendment. Senators Inhofe, Warner, Voinovich, Crapo, Chafee,
Cornyn, Murkowski, Thomas and Allard voted against the
amendment.
An amendment by Senator Voinovich to reauthorize the sewer
overflow control grants, clarifying that storm water is an
eligible expense, was accepted by voice vote as amended by a
second degree amendment by Senator Crapo to reauthorize the
National Estuary Program, the sewer overflow control grants,
create a Sewer Control Technology grant program and Small
Public Water System Assistance Program. Senator Voinovich
accepted the Crapo second degree amendment.
An amendment by Senator Reid to impose Davis Bacon
prevailing wage requirements on both the Clean Water SRFs and
Drinking Water SRFs was agreed to by roll call vote with 12
ayes and 7 nays. Senators Baucus, Boxer, Carper, Chafee,
Clinton, Graham, Lieberman, Murkowski, Reid, Voinovich, Wyden
and Jeffords voted for the amendment. Senators Allard, Bond,
Cornyn, Crapo, Thomas, Warner and Inhofe voted against the
amendment.
An amendment by Senator Reid to create a small system
assistance grant program was agreed to by roll call with 10
ayes and 9 nays. Senators Baucus, Bond, Boxer, Carper, Clinton,
Graham, Lieberman, Reid, Wyden, and Jeffords voted for the
amendment. Senators Allard, Chafee, Cornyn, Crapo, Murkowski,
Thomas, Voinovich, Warner and Inhofe voted against the
amendment.
An amendment by Senator Graham to create a water resources
research program was agreed to by a vote of 13 ayes and 6 nays.
Senators Baucus, Bond, Boxer, Carper, Chafee, Clinton, Graham,
Lieberman, Murkowski, Reid, Voinovich, Wyden and Jeffords voted
for the amendment. Senators Allard, Cornyn, Crapo, Thomas,
Warner and Inhofe voted against the amendment.
The committee passed the bill by voice vote with Senator
Jeffords recorded as voting nay.
Regulatory Impact Statement
In compliance with Section 11(b) of rule XXVI of the
Standing Rules of the Senate, the committee makes evaluation of
the regulatory impact of the reported bill. The bill does not
create any additional regulatory burdens, nor will it cause any
adverse impact on the personal privacy of individuals.
Mandates Assessment
In compliance with the Unfunded Mandates Reform Act of 1995
(Public Law 104-4), the committee finds that S. 1961 would not
impose unfunded mandates on local, State or tribal governments.
Appendix
Cost of Legislation
Section 403 of the Congressional Budget and Impoundment
Control Act requires that a statement of the cost of the
reported bill, prepared by the Congressional Budget Office, be
included in the report. That statement follows:
----------
CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
S. 2550, 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, as ordered reported by the
Senate Committee on Environment and Public Works on June 23,
2004, and revised by the committee staff on August 18, 2004.
Summary
CBO estimates that implementing this legislation would cost
about $20 billion over the next 5 years, assuming the
appropriation of the authorized amounts. The funds would be
used by the Environmental Protection Agency (EPA) to provide
grants to States and nonprofit organizations to support a wide
range of water quality projects and programs. The Joint
Committee on Taxation (JCT) estimates that enacting S. 2550
would reduce revenues by $222 million over the 2005-2009 period
and by $1.14 billion over the next 10 years. Enacting the bill
would not affect direct spending.
S. 2550 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated Cost to the Federal Government
The estimated budgetary impact of S. 2550 is shown in Table
1. The costs of this legislation fall within budget function
300 (natural resources and environment).
Basis of Estimate
For this estimate, CBO assumes that S. 2550 will be enacted
in the fall of 2004, that the full amounts authorized will be
appropriated for each year, and that outlays will follow the
historical pattern of spending for EPA programs. Components of
the estimated costs are described below.
TABLE 1. ESTIMATED BUDGETARY EFFECTS OF S. 2550, THE WATER INFRASTRUCTURE FINANCING ACT
By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
2004 2005 2006 2007 2008 2009
----------------------------------------------------------------------------------------------------------------
CHANGES IN REVENUES
Estimated Revenues\1\............................... 0 -1 -7 -26 -64 -124
SPENDING SUBJECT TO APPROPRIATION
EPA's Spending for Water Infrastructure and Grants
Under Current Law..................................
Authorization Level\2\.......................... 2,214 35 0 0 0 0
Estimated Outlays............................... 2,172 1,908 1,648 1,050 363 16
Proposed Changes....................................
Authorization Level............................. 0 6,524 6,943 7,342 9,217 12,677
Estimated Outlays............................... 0 1,141 2,366 4,127 5,914 6,871
EPA's Spending for Water Infrastructure and Grants
Under S. 2550......................................
Authorization Level\2\.......................... 2,214 6,559 6,943 7,342 9,217 12,677
Estimated Outlays............................... 2,172 3,049 4,014 5,177 6,277 6,887
----------------------------------------------------------------------------------------------------------------
\1\Estimate provided by JCT.
\2\The 2004 level is the amount appropriated for that year to EPA for the following programs: clean water State
revolving fund, safe drinking water State revolving fund, the national estuary program, and environmental
finance centers. The 2005 level includes the amount authorized under current law for the national estuary
program.
Revenues
This bill would increase the funds available under the
clean water State revolving fund (SRF) and the safe Drinking
Water SRF, which could result in some States leveraging their
funds by issuing additional tax-exempt bonds. The JCT estimates
that the consequent reductions in revenue would total $222
million over the 2005-2009 period and $1.14 billion over the
next 10 years.
Spending Subject to Appropriation
S. 2550 would authorize appropriations totaling about $43
billion over the next 5 years for EPA's water infrastructure
and grant programs (see Table 2).
TABLE 2. SPECIFIED AUTHORIZATIONS IN S. 2550
By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
2005 2006 2007 2008 2009
----------------------------------------------------------------------------------------------------------------
Clean Water SRF Grants\1\..................................... 3,200 3,200 3,600 4,000 6,000
Safe Drinking Water SRF Grants\1\............................. 1,500 2,000 2,000 3,500 6,000
Small System Revolving Fund................................... 25 25 25 25 25
Wet Weather Grants............................................ 250 250 250 250 250
Alternative Water Source Projects............................. 25 25 25 0 0
Grants for Lead Removal in Schools and in the District of 60 40 40 40 0
Columbia.....................................................
Environmental Finance Centers................................. 2 2 2 2 2
Technical Assistance for Nonprofits........................... 25 25 25 25 25
Small Public Water Assistance Grants.......................... 1,200 1,200 1,200 1,200 200
Research and Demonstration Grant Programs..................... 40 40 40 40 40
Sewage Control Technology Grant Program....................... 100 100 100 100 100
Southeast Colorado Safe Drinking Water Grant.................. 85 0 0 0 0
EPA Rate Study................................................ 1 1 0 0 0
National Estuary Program...................................... 0 35 35 35 35
Special Water Resources Study................................. 9 0 0 0 0
National Academy of Sciences Study............................ 2 0 0 0 0 ,
Total Authorization Level............................. 6,524 6,943 7,342 9,217 12,677
----------------------------------------------------------------------------------------------------------------
\1\SRF = State revolving fund.
The bill would authorize the appropriation of $35 billion
over the 2005-2009 period for EPA to provide capitalization
grants for the SRF program ($20 billion for the clean water SRF
program and $15 billion for the safe Drinking Water SRF
program). States would use such grants along with their own
funds to make low-interest loans to communities and grants to
Indian tribes to construct wastewater treatment facilities and
to fund other projects that would improve the quality of
drinking water. This bill would make several revisions to those
grant programs, including expanding the types of projects
eligible for assistance, changing the formulas used to allocate
grant money among the States, and extending the repayment terms
for loans made by States.
This legislation also would authorize the appropriation of
$1.25 billion over the 2005-2009 period for EPA to make grants
to States to remedy sewage overflows (that is, the discharge of
untreated wastewater) and stormwater runoff (that is, water
from rain or snow that doesn't infiltrate the ground). S. 2550
also would authorize the appropriation of $5 billion over the
same period for EPA to make grants to small public water
systems to address the cost of complying with drinking water
regulations. In addition, the bill would authorize about $1.5
billion over the next 5 years for various other purposes,
including establishing a small system revolving fund, several
grant programs aimed at promoting innovations in technology and
alternative approaches to water quality management, a grant
program to address the removal of lead from schools and in the
District of Columbia, a grant program for Southeast Colorado to
support the construction of a water transmission line, and an
EPA study of the rate structure of public water systems and
treatment works.
Intergovernmental and Private-Sector Impact
S. 2550 contains no intergovernmental or private-sector
mandates as defined in UMRA. The bill would benefit State,
local, and tribal governments by reauthorizing and expanding
grants to administer the revolving funds for the Clean Water
and Safe Drinking Water programs. In addition, it would provide
specific financial assistance to rural communities, school
systems (through the States), and the District of Columbia.
Estimate Prepared By: Federal Spending: Susanne S. Mehlman;
Federal Revenues: Annabelle Bartsch; Impact on State, Local,
and Tribal Governments: Gregory Waring; Impact on the Private
Sector: Karen Raupp.
Estimate Approved By: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Additional Views of Senators Jeffords, Baucus, Reid, Graham, Lieberman,
Wyden, Carper, and Clinton
GENERAL STATEMENT
S. 2550, the Water Infrastructure Financing Act,
reauthorizes the Clean Water State Revolving Fund (CWSRF) and
the Drinking Water State Revolving Fund (DWSRF) in an attempt
to increase funding available for critical water infrastructure
investments. However, this bill fails in several respects to
modernize the State Revolving Funds and to truly meet the water
infrastructure needs of our nation's communities.
BACKGROUND
S. 2550 amends two major statutes - the Federal Water
Pollution Control Act (Clean Water Act) and Title XIV of the
Public Health Service Act (Safe Drinking Water Act) to increase
authorized funding levels for each of the State Revolving Funds
(SRFs). The CWSRF was created in 1987 and the DWSRF was created
in 1996. S. 2550 focuses on modernizing the CWSRF.
Each time the Clean Water Act was substantially amended,
funding was a major issue. In 1972, 1987, and today, Congress
struggled to identify the appropriate level of the Federal
financial commitment to clean water. In testimony before the
Senate Committee on Environment and Public Works in October
2002, marking the 30th anniversary of the Clean Water Act,
former Senator George Mitchell (D-ME) outlined the history of
the struggle to provide clean water funding.
``In 1972, Congress chose to significantly increase
Federal participation in clean water programs. It
peaked at $5 billion in 1979 and 1980.
In 1981, President Reagan proposed the elimination
of all funding for clean water unless Congress reduced
the size and scope of the program. The Congress
attempted to respond to the President's demand. Clean
water funding was reduced from $5 billion a year to
$2.4 billion a year. We reduced the types and numbers
of projects that were eligible for Federal funding, and
we reduced the Federal share of the cost for
construction projects from 75 percent to 55 percent.
A further step to reform Federal involvement was
the adoption of a transition strategy to move the
country away from construction grants toward what was
then seen as an innovative mechanism called the State
Revolving Fund. The 1987 amendments authorized almost
$10 billion over 5 years for the phase-out of the
construction grants program and $8.4 billion over 5
years for the SRF. We knew at that time that this level
of funding was inadequate to fully meet our Nation's
clean water needs, which then were estimated at between
$75 billion and $100 billion. But this was a compromise
struck between those who favored and those who opposed
any Federal investment in clean water.
Regrettably, despite our efforts, President Reagan
vetoed the bill in 1986. In 1987, the Congress
reenacted the bill. The President vetoed it again, but
this time Congress overrode the veto and the Water
Quality Act became law.
In 1987, we envisioned a situation where after the
initial 5-year period of Federal investment, the SRF
would begin to revolve on its own and the Federal
investment in clean water programs would no longer be
necessary. That was not the first choice of many of us,
but it was necessary to get some legislation enacted to
keep the process moving. Mr. Chairman, as you and the
members of the committee know, Federal funding has
continued, now at an annual rate of about $1.3 billion
a year. I understand that the debate continues over the
level of and the mechanism and the formula for
distribution of the Federal investment in clean water .
. .''
Clean water funding is not a new issue. In fact, it has
been a focal point of debate surrounding clean water policy for
decades.
DISCUSSION
Today, the need for additional investment in both water and
drinking water infrastructure remains clear. There are three
major estimates of the spending gap for water infrastructure,
which range from $200 billion to $500 billion over 20 years. It
is imperative that we take care of this looming problem.
In April 2000, the Water Infrastructure Network
(WIN) released its first report, Clean and Safe Water
for the 21st Century, which identified a clean water
spending gap of $380 billion over 20 years and a
drinking water spending gap of $300 billion over 20
years.
On September 30, 2002, EPA released The Clean Water
and Drinking Water Infrastructure Gap Analysis which
estimates the spending gap for clean water needs at
$270 billion over 20 years. The Gap Analysis estimates
the spending gap for drinking water needs at $265
billion over 20 years.
In May 2002, the Congressional Budget Office (CBO)
released a report that estimated capital needs for
clean water and drinking water infrastructure.
Additional analysis by CBO estimated the spending gap
for clean water needs between $132 billion and $388
billion over 20 years and the spending gap for drinking
water needs at between $70 billion and $362 billion
over 20 years.
Over the last several years, a large, bi-partisan coalition
of Senators have sent letters requesting additional funds to
the President, the Budget Committee, and the appropriators.
On April 18, 2002, Senators Sarbanes, Jeffords, and
others joined colleagues in requesting $5.2B for
appropriations in fiscal year 2003.
On June 20, 2002, Senators Jeffords, Smith, Graham,
and Crapo also sent a letter to the Chairman and
Ranking Member of the VA, HUD and Independent Agencies
Subcommittee on the Appropriations Committee to request
additional resources to the Clean Water and Drinking
Water State Revolving Loan Funds.
On December 10, 2002, Senators Sarbanes and
Jeffords along with thirty-one colleagues sent a letter
to the President requesting his Fiscal 2004 budget
provide $5.2 billion for SRFs.
On March 7, 2003, Senators Sarbanes, Jeffords, and
Crapo sent a letter to the Senate Budget Committee
requesting $5.2B for SRFs.
On April 2, 2003, Senators Jeffords and Sarbanes
sent a letter to the Chairman and Ranking Member of the
Budget Committee to insist that the Senate-approved
funding levels for the Clean Water and Safe Water State
Revolving Loan Funds be approved in conference.
On May 9, 2003, twenty-nine senators signed a
bipartisan letter to the Chairman and Ranking Member of
the Appropriations Committee to ask them to provide an
allocation for the Subcommittee on VA, HUD, and
independent Agencies that will provide $5.2 billion for
the Clean Water and Safe Drinking Water Revolving Funds
(SRF). This letter was circulated by Senators Jeffords,
Crapo, and Sarbanes.
On March 2, 2004, thirty-one senators sent a
bipartisan letter to the Chairman and Ranking Member of
the Budget Committee to urge them to make clean water
and drinking water infrastructure a priority and
provide an allocation of $5.2 billion for the Clean
Water and Safe Drinking Water Revolving Funds (SRF).
This letter was circulated by Senators Sarbanes, Snowe,
and Jeffords.
Senators Sarbanes, Crapo, and Jeffords offered an
amendment to the Budget resolution in March 2004 to
provide an allocation of $5.2 billion for the CWSRF and
DWSRF. This amendment was accepted by voice vote.
On March 30, 2004, thirty-seven senators sent a bi-
partisan letter to the Chairman and Ranking Member of
the Budget Committee to urge the acceptance in
conference of the Senate-approved funding levels for
the Clean Water and Safe Drinking Water State Revolving
Fund (SRF), which provides $3.2 billion for the Clean
Water SRF and $2 billion for the Safe Drinking Water
SRF. This letter was circulated by Senators Carpo,
Sarbanes, and Jeffords.
On May 11, 2004, fifty-three senators sent a
bipartisan letter to the Chairman and Ranking Member of
the VA, HUD, and Independent Agencies Subcommittee on
the Appropriations Committee asking that they provide
$3.2 billion for the Clean Water Revolving Fund and $2
billion for the Safe Drinking Water Revolving Fund in
the FY05 appropriations bill. This letter was
circulated by Senators Jeffords, Sarbanes, and
Voinovich.
In the past two fiscal years, the Administration has sought
a 37 percent cut in clean water infrastructure spending,
proposing only $850 million for the CWSRF. For the past 2
years, Senators Crapo, Sarbanes, and Jeffords have offered an
amendment to the budget resolution to increase funding for
water infrastructure. Each year, the amendment was accepted by
the Senate, but failed to emerge from conference.
In the 107th Congress, the Committee on Environment and
Public Works passed S. 1961, the Water Investment Act, which
increased funding levels for the CWSRF and DWSRF to a total of
$35 billion over 5 years. This bill both increased the
authorized funding levels and took key steps to modernize the
SRFs. S. 2550 as reported by the committee does not achieve the
same result and does not represent a bi-partisan consensus on
the best approach to increase water infrastructure funding.
SUMMARY OF ISSUES
First, although the underlying bill was successfully
amended in committee to apply Davis-Bacon labor standards to
the CWSRF and the DWSRF, the report inaccurately describes the
evolution of these labor standards and their applicability to
the SRFs.
Second, despite the recent revelations regarding the
inadequacy of our current regulatory structure for lead in
drinking water, the provision related to lead in drinking water
that is included in this bill actually weakens rather than
strengthens existing statutory requirements. In addition, it
fails to take any action to address the No. 1 lesson learned
from the Washington, D.C. lead in drinking water incidents -
improving communication of health risks with the public. In
fact, this section actually eliminates existing statutory
requirements for the communication of the results of lead in
drinking water tests conducted in schools with parents.
Third, this bill takes no action to ensure that Federal
funds do not create an incentive for water infrastructure
investments that conflict with local development plans. It
fails to recognize and respond to the fact that by providing
funds for water infrastructure investments, the Federal
Government is, whether intentionally or unintentionally,
providing incentives for particular types of development.
Fourth, this bill fails to even attempt to enhance
compliance with the Clean Water Act by omitting a key provision
included in S. 1961, the Water Investment Act, during the 107th
Congress.
Fifth, the bill, after being successfully amended in
committee, takes into account the special circumstances
surrounding a series of specific water infrastructure needs,
and it authorizes a series of grant programs. However, the bill
also dictates spending decisions to States by creating a
mandatory set-aside for water infrastructure grants, reducing
the flexibility of States, reducing the funds available for
water infrastructure projects, and duplicating the program-
specific grants included in the bill.
Sixth, the formula replacing the existing Clean Water Act
distribution formula does not allow for adequate transition
time for States to adjust to revised allocations and unevenly
distributes the burden of the re-allocation of funds to a small
number of States.
Finally, the bill includes a project authorization for the
Southeast Colorado Water Activity Enterprise at a cost of $85
million with no explanation for its selection for earmarking in
the bill in lieu of many other similar projects.
DAVIS BACON
S. 2550 includes two provisions, sections 102 and 202,
which assure that Davis-Bacon prevailing wage requirements will
apply to all projects financed by federally capitalized State
revolving funds under both the Clean Water Act (CWA) and the
Safe Drinking Water Act (SDWA) for as long as these programs
continue to be federally funded.
Davis Bacon: Clean Water Act
Section 102 of this bill applies the Davis Bacon prevailing
wage standard to all funds distributed through the CWSRF. The
majority report includes a skewed interpretation of existing
law and the applicability of Davis Bacon to the CWSRF. Section
102 of S. 2550 clarifies that the prevailing wage requirements
of the Davis-Bacon Act incorporated in the Clean Water Act
(CWA) apply to construction of all projects financed with the
assistance of State revolving funds.
Section 513 of the CWA provides that ``all laborers and
mechanics employed by contractors or subcontractors on
treatment works for which grants are made under this Act shall
be paid wages at rates not less than those prevailing for the
same type of work on similar construction in the immediate
locality.'' The 1987 Water Quality Act shifted Federal support
for construction of treatment works under the CWA from a
program of direct Federal grants to a program of Federal
capitalization grants to support State revolving loan funds
(SRF) with the intention of phasing out the Federal
capitalization grant program by the end of fiscal year 1994. As
a result, section 602(b)(6) of the new Title VI of the CWA that
created the SRF program provided that the Davis-Bacon
prevailing wage requirements in section 513 of the Act would
continue to apply to all projects constructed ``before fiscal
year 1995 with funds directly made available'' by Federal
capitalization grants. Notwithstanding the expectation that
SRFs would become completely self-sufficient by fiscal year
1995, Congress has continued to appropriate funds for new
Federal capitalization grants to the States' SRFs every year
since.
Moreover, after enactment of the 1987 Water Quality Act,
the Administrator of the Department of Labor's Wage and Hour
Division concluded that, under newly enacted section 602(b)(6)
of the CWA, the Davis-Bacon prevailing wage requirements in
section 513 of the Act did not apply to ``State matching funds
required to be contributed into the SRF, moneys repaid to the
SRF, or other moneys.'' Under this interpretation, Davis-Bacon
prevailing wage requirements were applied the first time SRF
funds supported by Federal capitalization grants were used to
financially assist construction of a water treatment project;
however, when funds repaid back to the SRF were ``recycled''
and used again to support construction of additional water
treatment projects, Davis-Bacon would not apply. Furthermore,
EPA determined that, after the end of fiscal year 1994, the
Davis-Bacon prevailing wage requirements in section 513 of the
CWA no longer applied even to the construction of treatment
works financed by SRFs with funds made directly available by
Federal capitalization grants.
The combined effect of these interpretations has undermined
the longstanding policy of assuring that all construction
workers employed on projects supported by CWA grants should not
be paid less than locally prevailing wage rates. Accordingly,
in order to correct the evaporation of Davis-Bacon prevailing
wage protection for workers employed on construction projects
that continue to be financially assisted by EPA notwithstanding
Congress' expectation in 1987 that Federal support for this
activity would cease at the end of fiscal year 1994, section
102 of S. 2550 would amend section 603(c) of the CWA to provide
that the Davis-Bacon prevailing wage requirements in the Act
will once again apply to construction of all projects assisted
in whole or in part by SRFs with Federal funds, including those
supported by funds directly made available through Federal
capitalization grants and those supported by ``recycled''
Federal funds.
Davis Bacon: Safe Drinking Water Act
Section 202 of S. 2550 clarifies that the prevailing wage
requirements of the Davis-Bacon Act incorporated in the Safe
Drinking Water Act (SDWA) apply to construction of all projects
financed with the assistance of State revolving funds.
The SDWA was originally enacted in 1974. The Act authorized
EPA to make grants to assist in the development and
demonstration (including construction) of projects that exhibit
new or improved methods, approaches or technology for providing
a safe supply of drinking water to the public. Section 1450(e)
of the SDWA includes a broadly worded provision that directs
the EPA Administrator to ``take such action as may be necessary
to assure compliance with provisions of the [Davis-Bacon
Act].'' This provision not only obligates the EPA Administrator
to include Davis-Bacon prevailing wage requirements in
contracts for the construction projects to which EPA or the
Federal Government is a direct party, but also obligates the
Administrator to insure that such requirements are applied to
construction projects supported by grants and other forms of
assistance provided by EPA pursuant to authorization under the
SDWA. Any other interpretation of Section 1450(e) would render
it redundant inasmuch as the Davis-Bacon Act, itself, is
automatically applicable by operation of law to all contracts
in excess of $2,000 to which an agency of the federal
government is a party for construction of public buildings and
public works.
Thus, when Congress enacted the Safe Drinking Water Act
Amendments of 1996, which created the State Revolving Fund
(SRF) program that provides annual capitalization grants to
each State in order to fund an SRF that provides financial
assistance to local agencies to facilitate compliance with
EPA's national primary drinking water standards, it was
unnecessary to include a separate Davis-Bacon provision.
Nevertheless, EPA administratively determined that the Davis-
Bacon prevailing wage requirement in the SDWA does not apply to
construction projects assisted by the SRFs.
In order to clarify Congress' original intent, section 202
of S. 2550 would amend section 1450(e) of the SDWA to make it
clear that Davis-Bacon requirements apply to all construction
projects assisted in whole or in part by grants, loans, loan
guarantees, refinancing, or any other form of assistance
provided under the SDWA, including assistance provided by SRFs
with funds directly made available from Federal capitalization
grants or with ``recycled'' funds made available by repayment
of Federal capitalization grant funds. As such, section 202 of
S. 2550 would not expand application of Davis-Bacon prevailing
wage requirements to the SRFs authorized under the Safe
Drinking Water Act Amendments of 1996, but rather make clear
Congress' original intent that those requirements apply to all
construction projects assisted under the SDWA.
LEAD IN DRINKING WATER
Lead occurs naturally in the environment. However, during
the industrial revolution and subsequent years, lead became a
commonly used product in solder, paint, and other industrial
processes. Today, lead is commonly used in ammunition, solder
and lead pipes, ceramic glazes, computer monitors, and medical,
scientific and military equipment.
Lead exposure occurs today from a variety of sources
including air (burning fuel, lead smelters, burning solid
wastes), drinking water (lead pipes and solder), bodies of
water (contaminated by industrial waste or air deposition),
dust and soil around landfills and in old urban areas with lead
paint, food (accumulates in food chain/food storage), and paint
(banned in 1978.)
Health effects of lead depend on the extent of the
exposure. The target system for chronic exposure is the nervous
system. Hearing loss, high blood pressure, and anemia can
result. High levels damage the brain and kidneys and cause
miscarriage.
Lead exposure is particularly dangerous for children who
retain about 68 percent of the lead that enters their bodies
while adults retain about 1 percent, according to the
Environmental Health Education Center, University of Maryland
School of Nursing. Children exposed to lead may experience low
birth weight, growth retardation, mental retardation, learning
disabilities, muscle cramps, stomach cramps, anemia, and kidney
and brain damage. Lead is also particularly harmful during
pregnancy, affecting the unborn child or leading to
miscarriages and stillbirths.
The current blood lead level standard, set by the Centers
for Disease Control (CDC), is 10 parts per billion. The CDC
Advisory Committee for Blood Lead Levels is currently
undertaking a review to determine if this number should be
reduced. This review is in part spurred by a major study
published in the New England Journal of Medicine on April 17,
2003 which found that even blood lead level concentrations
below 10 micrograms per liter (or 10 parts per billion) are
harmful to children. A working group of the CDC Advisory
Committee completed a report in February 2004 indicating that
there are adverse effects of blood lead levels below 10 parts
per billion.
EPA Regulations on Lead in Drinking Water
Before 1991, EPA regulations included a Maximum Contaminant
Load of 50 parts per billion for lead in drinking water. In
June 1991, the EPA issued the lead and copper rule (56 FR
26460), which eliminated the MCL and established a new
framework for dealing with lead in drinking water. The Maximum
Contaminant Level Goal (MCLG) was set at zero. As described in
the report for S. 2550, in lieu of an enforceable standard for
lead content in drinking water, the rule establishes a sampling
program with a trigger threshold above which public water
systems have to take steps to change corrosion control, treat
source water, replace lead service lines, and conduct public
education.
In general, public water systems are required to sample
homes in areas where lead could be expected to be present in
drinking water (due to lead service lines, date of construction
of the homes, or other factors). If the 90th percentile of the
samples taken exceeds 15 parts per billion, the requirements of
the rule are triggered. If a system has extremely low lead
levels for two consecutive 6-month monitoring periods, it can
move to monitoring once every 3 years.
Once the 90th percentile requirement is triggered, the
public water system must take the following actions:
1. Water quality parameter monitoring used to determine
water corrosivity.
2. Public Education: specific requirements in
regulations regarding text of announcements. Billing
inserts must be sent directly to customers, newspaper
notices and public service announcements required.
There are no public education requirements if the 90th
percentile threshold is not triggered.
3. Source Water Monitoring and Treatment: sampling and
treatment changes to reduce lead concentration. State
involvement in establishing maximum permissible lead
levels in source water. In Washington, D.C., that
function would be performed by EPA Region III because
Washington, D.C. does not have primacy over the
administration of the Safe Drinking Water Act.
4. Corrosion Control Treatment: Study required to
identify changes in corrosion control required, follow-
up monitoring required. Study is allowed to take 18
months and systems have 24 months to install the
revised corrosion control treatment. This process could
take over 3 years, during which time a public water
system would remain in compliance with the lead and
copper rule.
If a system completes these actions and continues to exceed
the 90th percentile requirements, they are required to monitor
and/or replace lead service lines. The public water system must
replace 7 percent of their lead service lines per year OR they
may test the water in the service line and if all samples are
less than 15 parts per billion the system may ``count'' the
service line as replaced. This type of sampling is conducted in
the home, where residents run their faucet for a longer period
of time to get to the water in the pipe.
In summary, the effectiveness of the lead and copper rule
to reduce lead exposure through drinking water depends heavily
on public education. The extended time periods during which
corrosion control procedures can be modified while the water
system remains in compliance make it imperative that adequate
public education occurs to ensure that people take
precautionary steps to reduce lead exposure while water
chemistry is being modified.
In addition, because public water systems with extremely
low lead levels can move to a monitoring program that requires
testing only every 3 years, it is conceivable that public water
systems that have switched to chloramines to comply with the
disinfection by-product rule or for other reasons have not
tested their systems for lead contamination for a 3-year
period, raising concern about the degree to which the
experience of Washington, D.C. could be a national problem.
It is worth noting that under the Safe Drinking Water Act,
leaded solder in homes was banned as of 1987. However, ``lead-
free'' faucets are defined as containing 8 percent lead. The
industry has developed voluntary leaching standards for those
components that typically dispense water for human consumption.
Based on the information available to date, these voluntary
standards do not apply to bathtub faucets.
Washington, D.C. Experience
Earlier this year it was first reported that lead levels in
the D.C. public water system were significantly higher than
Federal guidelines, and had been so for more than 2 years. The
report for S. 2550 provides a detailed summary of the events in
Washington, D.C. with regard to lead in drinking water.
Committee Action
In response to the public health risk and the public
outrage at the handling of the Washington, D.C. situation,
Senator Jeffords and the democratic members of the Senate
Committee on Environment and Public Works requested a hearing
of the full committee on this issue. On April 7, 2004, the
Fisheries, Wildlife, and Water Subcommittee held a hearing
entitled, ``Detection of Lead in the D.C. Drinking Water
System.'' Testimony was received from Benjamin Grumbles, Acting
Assistant Administrator of the Office of Water at EPA, Donald
Welsh, Director, Region III, EPA, Jerry Johnson, General
Manager, District of Columbia Water and Sewer Authority, Dr.
Daniel Lucey, Interim Chief Health Officer, District of
Columbia Department of Health, Thomas Jacobus, General Manager,
Washington, Aqueduct, Baltimore District, U.S. Army Corps of
Engineer's Gloria Borland, Dupont Circle Parents, Dr. Jody
Lanard, M.D., Risk Communication Consultant, and Dr. Dana Best,
M.D., Children's National Medical Center.
On May 4, 2004, Senator Jeffords introduced the ``Lead-Free
Drinking Water Act of 2004'' with Senator Sarbanes and Delegate
Holmes-Norton, and Congressman Waxman introduced the House
companion bill. This legislation included a comprehensive
approach to improving the current regulatory structure for lead
in drinking water, based on the lessons learned from the
Washington, D.C. incident. The bill was referred to the Senate
Committee on Environment and Public Works, and no action has
been taken. A short summary of the bill follows:
Lead-Free Drinking Water Act of 2004
To amend the Safe Drinking Water Act to ensure that the
District of Columbia and States are provided a safe, lead-free
supply of drinking water.
Requires the Environmental Protection Agency
(EPA) to review and revise the national primary drinking water
regulation for lead within 18 months after the date of
enactment. The revised regulation shall establish a maximum
contaminant level (MCL) for lead in drinking water as measured
at the tap, or, if EPA determines that it is not practicable to
establish such a level, the Agency shall establish a treatment
technique to prevent adverse health effects. Requires that any
new standard be at least as protective as the current
regulations.
Accelerates and ensures complete replacement of
lead service lines in systems that exceed the MCL or action
level for lead in national primary drinking water regulations:
- Upon exceeding the MCL or action level for lead
under the national primary drinking water regulations,
a water system must replace at least 10 percent of its
lead service lines annually until they are gone.
- Priority is given to those homes with high lead test
results and those that provide drinking water to
infants, children, and pregnant and lactating women.
- Eliminate the existing loophole allowing systems to
avoid replacing lead service lines by conducting water
tests.
- Establishes community water systems or nontransient
noncommunity water systems as the responsible entity to
replace lead service lines, including those owned by
homeowners. Gives homeowners the final authority to
determine if their lead service line is replaced.
Revamps public notice requirements.
- Upon exceeding the MCL or action level for lead,
community water systems or nontransient noncommunity
water systems will, within 30 days, deliver notice to
all customers of the scope of the testing, the results,
and corrective actions to be taken. A warning will be
provided on all water bills regarding the presence of a
public health risk from high lead levels in the
drinking water. Repeat notice will be provided every 90
days as long as the exceedance continues.
- Community water systems or nontransient noncommunity
water systems will provide, within 14 days of the
receipt of results, notification to each home tested of
their own results, the scope of the testing conducted
and the results, and referrals for any required medical
intervention.
- Requires special emphasis on alerting parents,
caregivers, and other individuals and entities of the
significantly greater risks to infants, children and
pregnant and lactating women posed by lead
contamination of drinking water; and encouraging
individuals and entities when appropriate to
immediately modify behavior to minimize exposure to
lead in drinking water.
- Requires the EPA to establish verification
procedures to determine the effectiveness of public
notification within 6 months.
Establishes routine public education on lead in
drinking water.
- Requires routine public education programs at
community water systems or nontransient noncommunity
water systems that is designed to improve the general
level of public understanding of the risks posed by
lead contamination and protective actions that can be
taken. EPA may waive this requirement for systems that
have not exceeded the action level for lead since June
7, 1991.
Requires that, upon exceeding the MCL or action
level for lead, community water systems or nontransient
noncommunity water systems provide on-location filters
certified for lead removal to each residence, school, and day
care facility in the service area of the community water system
or nontransient noncommunity water system that could reasonably
be expected to experience lead contamination of drinking water
in excess of the MCL or action level for lead at any time after
the date of exceedance.
- Priority is given to vulnerable populations, such as
infants, children, and pregnant and lactating women,
and to residences, schools, and day care facilities
that should have priority based on testing results.
Filters are to be explicitly made available regardless
of whether individual residences are known to have lead
service lines.
Establishes testing requirements and corrective
actions for Federal buildings.
Requires one-time nationwide testing for lead in
drinking water at all community water systems or nontransient
noncommunity water systems to be completed within 18 months of
enactment.
Modifies monitoring protocols to ensure that
tests conducted under the national primary drinking water
regulations for lead are conducted at 6 month intervals, that a
statistically relevant sample is used that is fully
representative of all types of residential dwellings and
commercial establishments, and that increased testing is
conducted after any substantial modification in the treatment
of drinking water or during any period in which the drinking
water exceeds the MCL or action level for lead.
Requires that community water systems and
nontransient noncommunity water systems re-evaluate and
optimize corrosion control plans within 1 year of a change in
water treatment or an exceedance of the MCL or action level for
lead.
Establishes a lead service line replacement fund
that authorizes $200 million per year for 2005 through 2009.
Provides $40 million per year to the District of Columbia.
Revises current Safe Drinking Water Act
definition of ``lead-free'' as 8 percent lead to 0.2 percent
lead and makes it unlawful to import, manufacture, process,
distribute in commerce, or install in any residence anything
but lead-free plumbing fixtures and components as of January 1,
2005.
Establishes requirements for testing and removal
of lead in schools. Authorizes $30 million per year for this
purpose.
Committee Mark-Up of S. 2550, June 23, 2004
Amendment Offered by Senator Jeffords
During the mark-up of S. 2550 on June 23, 2004, Senator
Jeffords offered an amendment based on the Lead-Free Drinking
Water Act of 2004 to take the first critical steps to address
the most egregious issues that were highlighted by the
Washington, D.C. lead in drinking water crisis. This amendment
was endorsed by Consumer Federation of America, Clean Water
Network, Children's Defense Fund, and representatives of the
Washington, D.C. parents group involved in this issue. The
residents of DC wrote: ``It is our hope that other mothers in
this country will not have to experience the frustration,
anger, and fear that we have during the many months that this
crisis has dragged without resolution.''
First, the amendment strengthened existing public notice
requirements in several key ways. As described in the report to
S. 2550, one the leading complaints against WASA throughout
this period is that the agency failed to communicate
effectively with the public about how many homes had exceeded
the action level (and by how much) and what residents should do
to protect themselves. The effectiveness of the public
notification of the presence of lead in drinking water is the
crux of the Lead and Copper Rule. In testimony before the
Subcommittee on Fisheries, Wildlife and Water on April 7, 2004,
the Director of EPA's Region III, Donald Walsh, stated,
``public education efforts were ineffective, and we believe,
not fully compliant in all instances with EPA rules.''
Additional testimony from a risk management expert and D.C.
residents corroborated the view that public notification and
education efforts were ineffective.
Specifically, the Jeffords amendment took the following
steps to revamp public notice requirements:
Upon exceedance of the MCL or action level for
lead, community water systems or nontransient noncommunity
water systems, within 30 days, must deliver notice to all
customers of the scope of the testing, the results, and
corrective actions to be taken. A warning will be provided on
all water bills regarding the presence of a public health risk
from high lead levels in the drinking water. Repeat notice will
be provided every 90 days as long as the exceedance continues.
Community water systems or nontransient
noncommunity water systems will provide, within 14 days of the
receipt of results, notification to each home tested of their
own results, the scope of the testing conducted and the
results, and referrals for any required medical intervention.
Requires special emphasis on alerting parents,
caregivers, and other individuals and entities of the
significantly greater risks to infants, children and pregnant
and lactating women posed by lead contamination of drinking
water; and encouraging individuals and entities when
appropriate to immediately modify behavior to minimize exposure
to lead in drinking water.
Requires the EPA to establish verification
procedures to determine the effectiveness of public
notification within 6 months.
Despite the fact that the failure of the public
notification system is recognized as one of the most prominent
concerns heard from Washington, D.C. residents, S. 2550 as
amended by the Crapo amendment on lead takes no action to
reform or improve the public notification system associated
with the Lead and Copper Rule.
Second, the amendment required the removal of 10 percent of
all lead service lines per year until they are gone, once a
public water system exceeded the action level for lead. It is
commonly believed that the major cause of the Washington, D.C.
lead in drinking water incident was caused by increasing
corrosivity of the water supply, leading to leaching of lead
from lead service lines and plumbing components. The solution
selected by the EPA and WASA suggests that controlling the
corrosivity of the water supply will reduce lead content in the
water system. On August 23, 2004, WASA began adding
orthophosphate to the drinking water supply through the city to
reduce the corrosivity of the water supply in an effort to
reduce lead levels. EPA estimates that it will take 6 months to
detect a reduction in lead levels.
The current regulation requires replacement of 7 percent of
lead service lines per year only until a system no longer
exceeds the action level. In addition, the current rules allow
a public water system to ``test'' the water in the service line
and if all samples are less than 15 parts per billion the
system, to ``count'' the service line as replaced. The current
regulations ensure only one thing - that public water systems
that have lead service lines will never actually replace all of
them. As described in the report to S. 2550, there is a general
consensus that the cause of the lead problems in Washington,
D.C. was corrosive water causing lead to leach from lead
service lines. The Jeffords amendment closed the loophole
allowing public water systems to ``test out'' of lead service
line replacement requirements. It required the removal of lead
service lines from public water systems with lead contamination
problems, ensuring that the main source of that lead would be
eliminated. It authorized $200 million per year for the
replacement of lead service lines and earkmarked $40 million
per year for this purpose. Section 210 of S. 2550 takes no
action to eliminate lead service lines.
Third, the Jeffords amendment revised the current Safe
Drinking Water Act definition of ``lead-free'' from 8 percent
lead to 0.2 percent lead and made it unlawful to import,
manufacture, process, distribute in commerce, or install in any
residence anything but lead-free plumbing fixtures and
components as of January 1, 2005. The fact that a Federal
statute permits the advertisement of products as ``lead-free''
when they actually contain 8 percent lead is an egregious
violation of the public trust. In addition, since the adoption
of this definition, much progress has been made in the
development of lead-free alternatives, which are currently sold
on the open market by companies such as Cambridge Brass.
Phasing out lead in plumbing components, coupled with the
replacement of lead service lines, would have ensured that lead
is absent from our drinking water. S. 2550 as amended by the
Crapo amendment takes no action to modify this definition.
Finally, the Jeffords amendment required the testing and
remediation of lead contamination in schools and authorized $30
million annually for this purpose. This amendment made several
changes to existing law. The main improvements this amendment
makes over current law, section 1464 of the SDWA, are:
it increases funds available to States to
reimburse local educational agencies for costs incurred as they
conduct the testing and remediation of lead in schools;
it provides for the Administrator of the EPA to
carry out a program for the testing and remediation of lead
contamination in schools if States fail to do so;
it extended the expired authorization for $30
million per year for these purposes.
Section 1464 of the SDWA also requires that test results
for lead in drinking water in schools be made available to the
public and that parents, teachers, and employee organizations
are notified of the availability of those test results. The
Jeffords amendment required that testing and remediation occur,
that funds were available to States for this program, that
people were notified of the results, and that, if States failed
to execute a program, the EPA would execute a program to ensure
that testing and remediation of lead in schools would actually
occur.
The Jeffords amendment would have helped to restore public
confidence in a system that is broken and to ensure that lead
in our water is a thing of our past. This amendment would have
ensured that our children's schools will be lead-free, that
citizens will know when their water systems test high for lead,
that the words ``lead-free'' will actually mean ``lead-free'',
and that lead service lines will not be allowed to sit leaching
lead for decades in public water systems.
The Jeffords amendment was defeated by a vote of 10-9.
Voting for the amendment were Senators Jeffords, Baucus, Reid,
Graham, Lieberman, Boxer, Wyden, Carper, and Clinton. Voting
against the amendment were Senators Inhofe, Warner, Bond,
Voinovich, Crapo, Chafee, Cornyn, Murkowski, Thomas, and
Allard.
Amendment Offered by Senator Crapo
Instead of adopting the Jeffords amendment which would have
taken substantive action to reduce lead in drinking water, the
committee adopted the Crapo amendment regarding lead which,
instead of enhancing public health protection as a result of
the Washington, D.C. lead in drinking water crisis, actually
rolls back existing requirements. Section 210 of S. 2550
establishes as similar reimbursement program to that in
existing law, section 1465 of the SDWA, and that established by
Senator Jeffords' amendment. Section 1465 in current law
provided funds to assist States in meeting the requirements of
section 1464 which required that States establish an assistance
program for local educational agencies to test and remediate
lead contamination in drinking water from coolers and other
sources in schools. This section also required that results of
testing be available to the public, including teachers, other
school personnel, and parents. It also required remediation of
non lead-free drinking water coolers in schools within 15
months of October 31, 1988. The Jeffords amendment mirrored
these provisions.
The majority report describes the results of the court
case, Acorn v. Edwards (U.S. 5th Circuit, 1996), in which the
Court struck down as unconstitutional Sections 1464(d)(1) and
(d)(3) because they violated the 10th Amendment of the
Constitution. The report quotes a portion of the Court's
decision which stated, ``that section 300j-24(d) [SDWA Section
1464(d)] is an unconstitutional intrusion upon the States'
sovereign prerogative to legislate as it sees fit.'' The report
cites this Court decision as justification for the deletion of
the testing and remediation program and the public notification
requirements of Section 1464.
However, the majority report excludes the first half of
this sentence in Acorn v. Edwards, which explained that the
reason for the Court's finding was because States did not have
the option to decline regulation. ``Because Sec. 300j-24(d)
deprives States of the option to decline regulating non-lead
free drinking water coolers, we likewise find no merit to this
argument and conclude that Sec. 300j-24(d) is an
unconstitutional intrusion upon the States' sovereign
prerogative to legislate as it sees fit.'' Acorn v. Edwards, 81
F. 3d 1387 at 1394 (1996). The Jeffords amendment solved this
problem by requiring that, if a State did not execute the
testing, remediation, and public notification requirements, the
EPA would be required to perform this function. Thus, the
Jeffords amendment established a program to test and remediate
lead in drinking water in schools, provided funds for States to
implement the program, ensured that this program would actually
occur by requiring EPA to perform these functions if States did
not - thereby resolving the concerns of the Court with regard
to the 10th Amendment, and retained existing public
notification requirements for test results.
Section 210 of S. 2550, as offered by Senator Crapo,
strikes all of the testing and remediation requirements of
section 1464 and, in lieu of those requirements, authorized a
voluntary reimbursement program for States who choose to take
action to address lead in schools. Section 210 of S. 2550
specifically excluded provisions making test results available
to the public. Instead of responding to the public outrage over
the lack of information provided about the Washington, D.C.
lead incident, section 210 of S. 2550 amendment actually
removes existing public notification requirements in current
law. Instead of responding to the public concern regarding lead
in schools, section 210 of S. 2550 actually rolls back existing
requirements for testing and remediation of lead in schools by
turning mandatory requirements into voluntary requirements.
Overall, section 210 of S. 2550 fails to take meaningful action
to enhance protections from lead in drinking water provided by
our current statutes and regulations and, instead, rolls back
existing protections designed to protect children from exposure
to lead in schools.
DEFERENCE TO LOCAL GOVERNMENTS
The Water Infrastructure Financing Act fails to take action
to ensure that Federal funds do not create an incentive for
water infrastructure investments that conflict with local
development plans. It fails to recognize and respond to the
fact that by providing funds for water infrastructure
investments, the Federal Government can often drive local
decisions about development and growth.
Commercial and residential development requires substantial
infrastructure to support it. It requires investment from the
public sector for roads, water lines, and school and public
safety resources, as well as private infrastructure such as
power and telephone lines. Public officials have developed
infrastructure-related tools for managing growth. For example,
local officials may establish urban service areas, adopt
adequate public facilities ordinances, levy impact taxes or
fees, or use similar mechanisms to internalize the true
economic costs of new development. In addition, an increasing
number of States have recently enabled or required local
jurisdictions to manage land more efficiently through the
designation of growth areas or application of State criteria
for funding infrastructure.
Usually costing of millions of dollars per mile, capital
investments in new water infrastructure are among the most
expensive forms of public infrastructure needed to support
development. Sewage treatment plants often cost millions of
dollars each, and water lines cost several hundred thousand
dollars per mile, costs that are not insignificant. Moreover
the costs of operation and maintenance of infrastructure are
substantial and continuing.
Infrastructure construction is not only capital intensive;
it has a significant effect on the environment. In a report
from the Open Lands Project, a Chicago-based urban conservation
group, the group found that water infrastructure plans which
are not coordinated with development plans such as land use
plans, watershed plans, and transportation plans may cause
environmental problems. The report states, ``the effect of
urbanization on water quality may be the most important
`environmental impact' of the entire [planning] process, and
yet it remains unexamined and unaddressed.'' The report also
found that because infrastructure plans were not sufficiently
coordinated with development plans, ``the State has allowed
communities to extend sewer lines into areas that include
wetlands, flood plains and other environmentally sensitive
property.''
State and local officials bear the responsibility of making
choices about their own approaches to development. Because the
Federal Government plays a prominent role in the financing of
water infrastructure, Congress is also partly responsible to
ensure that funding for water infrastructure through the SRF
solves existing water quality problems and complements, rather
than conflicts with, ongoing State or local initiatives to
manage growth and development.
Senator Jeffords offered an amendment during the business
meeting on June 23, 2004 to address this issue. The amendment
would have taken four specific actions:
Similar to the priority system amendments in
section 105 of S. 2550, States would give additional priority
in distributing funds from SRFs to projects that are consistent
with existing local land use, transportation, and watershed
plans, and to those projects that review options for urban
waterfront development or brownfields revitalization that may
be conducted in conjunction with the project. This section
would not require that any new plans be created. Instead, it
depends on existing plans created by local governments as the
guide. If water infrastructure projects are consistent with
these guides, they would receive additional priority. If not,
they would remain eligible, but would simply not receive
additional priority for this particular factor;
The existing continuous planning process required
by section 303(e) of the CWA would be revised to incorporate
applicable regional or local land use plans. This section does
not add any new planning requirements. It requires only that
regional or local land use plans be reviewed as part of the
existing continuous planning process;
A National Academy of Sciences study would be
authorized on the impact of water and wastewater investments on
local land use development patterns; and
Extra priority would be given to States when
distributing SRF funds to an explicit list of waterfront
redevelopment projects. Projects included in this list are:
Windsor, Vermont, Riverside Redevelopment.
St. Louis, Missouri, Brownfield Pilot Program.
Hudson River Park, New York.
Fields Point, Rhode Island.
Milwaukee, Wisconsin, Riverfront Development.
Lawrence Gateway Environmental Restoration Project.
Detroit River, Michigan, Master Plan.
Ohio Riverfront Sturdy, Cincinnati, Ohio.
Montgomery, Alabama, Riverfront Development.
Wabash Riverfront Development, Indiana.
Mississippi Riverfront, Tennessee.
The Jeffords amendment failed in committee by a vote of 10-
9 with Senators Jeffords, Baucus, Reid, Graham, Lieberman,
Boxer, Wyden, Carper, and Clinton supporting the amendment and
Senators Inhofe, Warner, Bond, Voinovich, Crapo, Chafee,
Cornyn, Murkowski, Thomas, and Allard voting against the
amendment.
INCENTIVES FOR COMPLIANCE
S. 1961, the Water Investment Act, passed by the Committee
on Environment and Public Works in the 107th Congress included
a provision that treatment works found to be in significant
noncompliance with the Clean Water Act are prohibited from
receiving assistance other than those funds that would be
needed to bring a system into compliance in accordance with an
enforceable administrative or judicial order or other than
those funds for planning, design, or security. The exceptions
in that bill ensured that utilities that are seeking to return
to compliance are still eligible, that planning and design
functions are still eligible, and that security improvements
are still eligible.
This provision would provide an added incentive for
utilities to maintain compliance with the CWA. It targets the
worst offenders-the primary criteria for significant non-
compliance are:
exceed specific conventional pollutant limits by
40 percent or specific toxic pollutantlimits by 20 percent at a
given discharge point for two or more months during the two
consecutive quarters;
violate any monthly effluent limit at a given
point by any amount for any four or more months during the two
consecutive quarters.
A recent EPA report by the Office of Enforcement and
Compliance Assistance documented extensive non-compliance with
the CWA. In 2002, 83 percent of facilities in SNC were repeat
SNCs. In 2001, 25 percent of major facilities were in SNC.
Sixteen percent-29 percent remained in that status for 2 years
or longer. Of those that returned to compliance, there is a 50/
50 probability that they will return to SNC again within 2
years.
Given the large number of facilities in SNC and the
apparent frequency with which they return to SNC, it is clear
that incentives to encourage compliance are required. However,
S. 2550, the Water Infrastructure Financing Act, includes no
provisions to provide an incentive for compliance or to ensure
that Federal funds are spent in a manner that leads to
compliance. A provision similar to that included in section 103
of S. 1961, the Water Investment Act, in the 107th Congress was
included in the substitute amendment offered by Senator
Jeffords which failed by a vote of 10-9. Voting in support of
the amendment were Senators Jeffords, Baucus, Reid, Graham,
Lieberman, Boxer, Wyden, Carper, and Clinton. Senators Inhofe,
Warner, Bond, Voinovich, Crapo, Chafee, Cornyn, Murkowski,
Thomas, and Allard voted against the amendment.
GRANTS
S. 2550, as amended, recognizes that there are some needs
that should be met above and beyond the funding levels
authorized in the Clean Water State Revolving Fund. In
particular, wet weather, stormwater, and small community needs
are some of the most pressing water quality problems facing
municipalities today. The second degree amendment offered by
Senator Crapo to the Voinovich amendment on this topic included
amendments filed by Senators Jeffords (wet weather and
stormwater), Warner (Chesapeake Bay), Chafee (National
Estuaries), Graham (alternative water source development) and
Reid (small systems).
However, the bill also dictates spending decisions to
States by creating a mandatory set-aside for water
infrastructure grants, reducing the flexibility of States,
reducing the funds available for water infrastructure projects,
and duplicating the program-specific grants included in the
bill. On September 14, 2004, the Council of Infrastructure
Financing Authorities (CIFA) wrote to the committee stating,
``This provision is troubling in several respects. Initially,
it seems at odds with the goal you support of allowing States
maximum flexibility in determining how best to meet their
individual water quality priorities. An arbitrary set aside
runs counter to the primary role provided to the States in
managing the SRFs.'' CIFA goes on to say:
``The legislation specifies no basis for the grant
set aside. The requirement is not directed toward
addressing hardship situations nor is any financing
need identified that would require a grant in lieu of a
loan. Further, the language permitting a waiver of the
grant requirement if loan applications are processed
timely leaves in even greater doubt the possible
rationale for the set aside requirement.
While there is no apparent benefit deriving from
the set aside, there are a number of potential adverse
impacts. A set aside to provide grants is contrary to
the underlying purpose of the revolving fund to
continually maximize available resources, derived from
Federal capital grants, State matching dollars and the
loan repayment stream, to finance water infrastructure.
The cumulative effect of a 10 percent set aside, not
subject to repayment to the SRF, would be a significant
diminishing in funds revolving and thus less financing
ultimately available to communities.
In the case of States that leverage SRF funds, the
negative impact of the set aside is multiplied. States
have discretion to use the Federal capitalization
grants as collateral to borrow in the public bond
market to increase the pool of available funds for
project lending. Assuming a leveraging factor ranging
from 2:1 to 3:1, States could experience as much as a
30 percent reduction in project funding initially as a
result of the grant set aside requirement. Over time
this reduction will increase exponentially.''
CWA FUNDING FORMULA
The revisions to the Clean Water Act SRF distribution
formula included in the Water Infrastructure Financing Act are
flawed in two important ways. First, the formula places unfair
burdens on three States-Iowa, Michigan, and West Virginia-to
the benefit of the others. To illustrate, if the Majority
formula proposal were adopted, Michigan would see its
allocation over 5 years cut by more than half, or over $166
million. Iowa and West Virginia would also see substantial cuts
over the same 5-year period. All together, these three States
would see $215 million less over the life of the formula. The
majority of States would see only very modest gains in
allocations over 5 years; Florida, a State with burgeoning
water infrastructure funding needs, would see barely an
increase of $5 million over 5 years. More damaging than the
inequitable distribution of losses under the formula in the
Water Infrastructure Financing Act, is the formula's lack of a
period of time to transition from a States' current allocation
to the proposed allocation. The immediacy of the adoption of
what is in some cases major change in a States' allocation
using the formula in the Water Infrastructure Financing Act is
likely to compromise the ability of the water authorities in
those States to carry out their mission.
In contrast, the substitute amendment offered by Senator
Jeffords at the mark-up on June 23, 2004 included a revised
formula that would spread losses more thinly across States and
allow time for the losses to take effect. Using a ``transition
period'' over the 5-year lifespan of the formula, States that
experience losses in water infrastructure funding are protected
from significant cuts in the first year, and are allowed to
absorb those cuts over time.
PROJECT AUTHORIZATIONS
Finally, the bill includes a project authorization for the
Southeast Colorado Water Activity Enterprise at a cost of $85
million with no explanation for its selection for earmarking in
the bill in lieu of many other similar projects. The report
accompanying the reported bill includes no explanation as to
why this project was selected as the nation's highest priority
for water projects in the Safe Drinking Water Act program. In
addition, the substitute amendment offered by Senator Jeffords
included project authorizations for multiple water
infrastructure projects. This amendment failed by a vote of 10-
9 with Senators Jeffords, Baucus, Reid, Graham, Lieberman,
Boxer, Wyden, Carper, and Clinton voting for the amendment and
Senators Inhofe, Warner, Bond, Voinovich, Crapo, Chafee,
Cornyn, Murkowski, Thomas, and Allard voting against the
amendment. The projects which failed to receive support in this
amendment and therefore, are not authorized in this bill,
include:
Memphis Metropolitan Area Groundwater Study, Arkansas,
Tennessee;
Old Nogales Highway, Colonia, Arizona;
Big Creek Watershed Restoration through Stormwater Control,
Georgia;
White River Environmental Restoration through CSO
Replacement, Indiana;
Bastrop Morehouse Parish Water Supply, Louisiana;
Fall River and New Bedford Environmental Infrastructure
Project, Massachusetts;
Statewide Combined Sewer Overflow Upgrades, Michigan;
Northeastern Minnesota water infrastructure, Minnesota;
DeSoto County Environmental Infrastructure, Mississippi;
Lower Platte River Drinking Water, Nebraska;
Central New Mexico Environmental Infrastructure, New Mexico;
Parshall Drinking Water Supply, North Dakota;
Southeastern Pennsylvania Water Infrastructure, Pennsylvania;
Lake Marion and Lake Moultrie drinking water and wastewater
collection, South Carolina;
Cheyenne River Sioux Tribe Water System, South Dakota;
Colonias environmental infrastructure, Texas;
Park City Water infrastructure, Utah;
Chittenden County Storm Water Improvement, Chittenden County,
Vermont;
Town of Waitsfield--Wastewater Treatment Facilities/Water
relocation;
Town of Colchester Airport Parkway;
Wastewater Treatment Plant, South Burlington, Vermont;
The following California Affordable Quantity and Quality
Water Act (CAL-AQQWA) Feasibility Studies:
A conjunctive use project, in cooperation with the Calaveras
County Water District;
A water reclamation project, in cooperation with the city of
Carson;
A water reclamation project, in cooperation with the
Coastside County Water District;
A water supply project at Pacheco Creek, Los Viboras Creek,
and Dos Picachos Creek, in cooperation with the San
Benito County Water District;
A wetland restoration project, in cooperation with the city
of San Diego;
A sediment management project at the Twitchell Reservoir, in
cooperation with the Santa Maria Valley Water
Conservation District;
A groundwater assessment project at the North River, in
cooperation with the Tia Juana Valley County Water
District;
Regional Seawater Desalination Program-San Diego County Water
Authority;
Mission Springs Water District Water and Water
Infrastructure-Desert Hot Springs;
Eastern Santa Clara River Subbasin (Perchlorate) Remediation
Initiative-Castaic Lake Water Agency;
Bay Area Regional Desalination Project;
Calexico New River Public Health Protection Project;
South Montebello Water Infrastructure Improvement-Montebello;
Big Bear Lake Environmental Restoration project, San
Bernardino Mountains;
Recycled Water Transmission Pipelines/pipeline construction,
Eastern Municipal Water district;
Raymond Basin Groundwater Restoration Project-Raymond Basin
Management Board;
Groundwater Recovery Enhancement and Treatment (GREAT)
Program, city of Oxnard;
Beach Septic System Improvements, Los Angeles County;
San Diego Region Three Reservoir Intertie Project, San Diego
County;
Port of Stockton, Port of Stockton (Rough and Ready Island);
Amador Regional Wastewater Collection and Treatment project,
Amador Water Agency;
Canal Point Wastewater System, city of Pahokee, Florida;
City of Marathon Wastewater Improvement, city of Marathon,
Florida;
Cypress Creek Restoration, Florida;
Key West Stormwater Improvements, Florida;
Lake Region Water Treatment Plan, Florida;
Lower West Coast Regional Irrigation Distribution System,
Florida;
Miami Dade NW Wellfield-UV Disinfection of Raw Water,
Florida;
Tri-County Biosolids Pelletization Facility, Florida;
East-Central Florida Integrated Water Resources Project,
Florida;
Arkansas Valley Conduit, Colorado;
Southeast Colorado publicly owned water related environmental
infrastructure, Colorado;
Anacostia River Ecosystem Restoration and Combined Sewer
Overflow, Washington, D.C.;
Baltimore Metropolitan/Gwynns Falls project, Maryland;
St. Louis Environmental Infrastructure, Missouri;
Lake Tahoe Restoration, Nevada;
Henderson Watershed Assistance, Nevada;
Ohio Environmental Infrastructure Program, Ohio;
Rural Washington wastewater treatment and water supply,
Washington;
Milwaukee Metropolitan Sewer District, Wisconsin; and
Wind River Irrigation Project, Wyoming.
Additional Views of Senator Jeffords
July 11, 2004
James Inhofe
Chairman, Senate Environment and Public Works Committee
Washington, DC
James Jeffords
Ranking Member, Senate Environment and Public Works Committee
Washington, DC
Michael Crapo
Chairman, Subcommittee on Fisheries, Wildlife and Water
Senate Environment and Public Works Committee
Washington, DC
Dear Senators Inhofe, Jeffords and Crapo:
I write to you today to express our concerns regarding S. 2550, the
Water Infrastructure Financing Act. I believe that the changes to the
Clean Water Act State Revolving Fund allocation formula proposed in
this bill would continue the tremendous funding disparity in clean
water funds that leaves many States, including my own, with
insufficient resources to even come close to meeting their water
infrastructure needs. That is wrong and it has to change. Let me tell
you why this bill does not address the problem.
The proposed formula in S. 2550 is not a true needs-based
allocation. Instead, the bill uses needs as a target for future
allocations, tying consideration of need to future appropriations
levels for the entire fund. To shift from the current allocation to the
target allocation under the needs survey, the appropriation level of
the fund must reach $3.15 billion. That appropriation level, however,
has only averaged $1.35 billion a year, which is a far cry from the
trigger. Consequently, under the proposed formula, there is a real
possibility that States, like my home State of Arizona, will never
receive their fair share of the funds authorized and appropriated for
the State Revolving Fund.
In those years that we do not appropriate $3.15 billion, which I
predict will be every year, the bill's transition formula would apply.
The transition formula protects small states--which, under this
formula, grow first--and permits large States to keep their current
large allocation despite lack of need. These limits on growth and loss
are nothing more than a recipe for choosing winners and losers. In
effect, the Committee is asking States with exploding populations and
growing needs, like my own, to subsidize the water infrastructure in
these other States and pay more for the same infrastructure within
their own States. This is not sound Federal policy. For those States
that would receive less funding under a needs-based formula, the burden
should be on them to explain why their States should receive more than
they need while other States receive dramatically less.
I have consistently advocated a formula that is based on need as
documented in the EPA Clean Water Act Watershed Needs Survey. In August
2001, I offered an amendment to the VA-HUD appropriations bill that
would have changed the allocation formula to a needs-based formula with
a 1-percent floor. I withdrew the amendment, but only after securing a
commitment from this Committee and a Senate Resolution, to work
together to fix this problem and report out a needs-based allocation
formula. I have worked closely with you and your Committee since then,
including testifying on this issue. I had high hopes that we would make
progress this year to get a bill that was fair and equitable for all of
the States. Thus, I was surprised and disappointed to hear that you are
moving forward with S. 2550, the Water Infrastructure Financing Act.
Moving to a needs-based formula would eliminate unfunded mandates
in a manner that is fair and equitable. There is a precedent here in
the Safe Drinking Water Act, which allocations funds on the basis of
drinking water need. In the time since the markup, you once again
indicated your willingness and pledged your support to work with us to
address this issue. I am ready to work with you and look forward to
getting this issue resolved this time.
Sincerely,
Jon Kyl
United States Senator
Changes in Existing Law
In compliance with section 12 of rule XXVI of the Standing
Rules of the Senate, changes in existing law made by the bill
as reported are shown as follows: Existing law proposed to be
omitted is enclosed in [black brackets], new matter is printed
in italic, existing law in which no change is proposed is shown
in roman:
* * * * * * *
----------
[33 U.S.C. 1251 ET SEQ.--JUN. 30, 1948]
FEDERAL WATER POLLUTION CONTROL ACT
* * * * * * *
SEC. 220. PILOT PROGRAM FOR ALTERNATIVE WATER SOURCE PROJECTS.
(a) * * *
* * * * * * *
(j) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section [a total of
$75,000,000 for fiscal years 2002 through 2004] $25,000,000 for
each of fiscal years 2005 through 2007. Such sums shall remain
available until expended.
* * * * * * *
[SEC. 221. SEWER OVERFLOW CONTROL GRANTS.]
SEC. 221. WET WEATHER GRANTS.
(a) In General.--In any fiscal year in which the
Administrator has available for obligation at least
$1,350,000,000 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] , sanitary sewer overflows, and
stormwater runoff; 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 nine 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];
(3) is a municipality that is subject to the Phase
I or Phase II stormwater regulations;
[(3)] (4) is requesting a grant for a project that
is on a State's intended use plan pursuant to section
606(c); or
[(4)] (5) is an Alaska Native Village.
(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)] 603(i), 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.] section $250,000,000 for each of
fiscal years 2005 through 2009, to 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]
, sanitary sewer overflow controls, and
stormwater runoff 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] , sanitary sewer overflow,
and stormwater runoff nationwide.
* * * * * * *
SEC. 320. NATIONAL ESTUARY PROGRAM.
* * * * * * *
(i) Authorization of Appropriations.--There are authorized
to be appropriated to the Administrator not to exceed
[$35,000,000 for each of fiscal years 2001 through 2005]
$35,000,000 for each of fiscal years 2005 through 2010 for--
(1) expenses related to the administration of
management conferences under this section, not to
exceed 10 percent of the amount appropriated under this
subsection;
(2) making grants under subsection (g); and
(3) monitoring the implementation of a conservation
and management plan by the management conference or by
the Administrator, in any case in which the conference
has been terminated.
The Administrator shall provide up to $5,000,000 per fiscal
year of the sums authorized to be appropriated under this
subsection to the Administrator of the National Oceanic and
Atmospheric Administration to carry out subsection (j).
* * * * * * *
REPORTS TO CONGRESS
Sec. 516. The Administrator, in cooperation with the
States, including water pollution control agencies and other
water pollution control planning agencies, shall make (1) a
detailed estimate of the cost of carrying out the provisions of
this Act; (2) a detailed estimate, biennially revised, of the
cost of construction of all needed publicly owned treatment
works in all of the States and of the cost of construction of
all needed publicly owned treatment works in each of the
States; (3) a comprehensive study of the economic impact on
affected units of government of the cost of installation of
treatment facilities; and (4) a comprehensive analysis of the
national requirements for and the cost of treating municipal,
industrial, and other effluent to attain the water quality
objectives as established by this Act or applicable State law.
The Administrator shall submit such detailed estimate and such
comprehensive study of such cost to the Congress no later than
February 10 of each [odd-numbered] fourth year. Whenever the
Administrator, pursuant to this subsection, requests and
receives an estimate of cost from a State, he shall furnish
copies of such estimate together with such detailed estimate to
Congress.
* * * * * * *
SEC. 603. WATER POLLUTION CONTROL REVOLVING LOAN FUNDS.
(a) Requirements for Obligation of Grant Funds.--Before a
State may receive a capitalization grant with funds made
available under this title and section 205(m) of this Act, the
State shall first establish a water pollution control revolving
fund which complies with the requirements of this section.
(b) Administrator.--Each State water pollution control
revolving fund shall be administered by an instrumentality of
the State with such powers and limitations as may be required
to operate such fund in accordance with the requirements and
objectives of this Act.
[(c) Projects Eligible for Assistance.--The amounts of
funds available to each State water pollution control revolving
fund shall be used only for providing financial assistance (1)
to any municipality, intermunicipal, interstate, or State
agency for construction of publicly owned treatment works (as
defined in section 212 of this Act), (2) for the implementation
of a management program established under section 319 of this
Act, and (3) for development and implementation of a
conservation and management plan under section 320 of this Act.
The fund shall be established, maintained, and credited with
repayments, and the fund balance shall be available in
perpetuity for providing such financial assistance.]
(c) Projects Eligible for Assistance.--
(1) Requirements.--A project shall be eligible to
receive funding, in whole or in part, from a State
water pollution control revolving fund under this
section only if the project meets the requirements of
section 513.
(2) Use of funds.--Funds in each State water
pollution control revolving fund shall be used only
for--
(A) providing financial assistance to a
municipality, intermunicipal, interstate, or
State agency, or private utility that
principally treats municipal wastewater or
domestic sewage, for construction (including
costs for planning, design, associated
preconstruction, and necessary activities for
siting the facility and related elements) of
treatment works (as defined in section 212);
(B) implementation of a management program
established under section 319;
(C) development and implementation of a
conservation and management plan under section
320;
(D) water conservation projects or
activities the primary purpose of which is the
protection, preservation, or enhancement of
water quality, including through--
(i) piping or lining of an
irrigation canal;
(ii) recovery or recycling of
wastewater or runoff from irrigation;
(iii) irrigation scheduling;
(iv) measurement or metering of
water use; or
(v) improvement of on-field
irrigation efficiency;
(E) providing financial assistance to a
municipality or an intermunicipal, interstate,
or State agency for reuse, reclamation, or
recycling projects the primary purpose of which
is the protection, preservation, or enhancement
of water quality;
(F) 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); or
(G) 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.
(d) Types of Assistance.--Except as otherwise limited by
State law, a water pollution control revolving fund of a State
under this section may be used only--
(1) to make loans, on the condition that--
(A) such loans are made at or below market
interest rates, including interest free loans,
at terms not to exceed 20 years;
(B) annual principal and interest payments
will commence not later than 1 year after
completion of any project and all loans will be
fully amortized not later than 20 years after
project completion;
(C) the recipient of a loan will establish
a dedicated source of revenue for repayment of
loans; and
(D) the fund will be credited with all
payments of principal and interest on all
loans;
(2) to buy or refinance the debt obligation of
municipalities and intermunicipal and interstate
agencies within the State at or below market rates,
where such debt obligations were incurred after March
7, 1985;
(3) to guarantee, or purchase insurance for, local
obligations where such action would improve credit
market access or reduce interest rates;
(4) as a source of revenue or security for the
payment of principal and interest on revenue or general
obligation bonds issued by the State if the proceeds of
the sale of such bonds will be deposited in the fund;
(5) to provide loan guarantees for similar
revolving funds established by municipalities or
intermunicipal agencies;
(6) to earn interest on fund accounts; [and]
(7) for the reasonable costs of administering the
fund and conducting activities under this title, except
that such amounts shall not exceed [4 percent] 6
percent of all grant awards to such fund under this
title[.] ; and
(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.
(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 the forgiveness of
the principal of the loan.
(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).
[(e)] (f) Limitation To Prevent Double Benefits.--If a
State makes, from its water pollution revolving fund, a loan
which will finance the cost of facility planning and the
preparation of plans, specifications, and estimates for
construction of publicly owned treatment works, the State shall
ensure that if the recipient of such loan receives a grant
under section 201(g) of this Act for construction of such
treatment works and an allowance under section 201(l)(1) of
this Act for non-federal funds expended for such planning and
preparation, such recipient will promptly repay such loan to
the extent of such allowance.
[(f)] (g) Consistency With Planning Requirements.--A State
may provide financial assistance from its water pollution
control revolving fund only with respect to a project which is
consistent with plans, if any, developed under sections 205(j),
208, 303(e), 319, and 320 of this Act.
[(g)] [(h) Priority List Requirement.--The State may
provide financial assistance from its water pollution control
revolving fund only with respect to a project for construction
of a treatment works described in subsection (c)(1) if such
project is on the State's priority list under section 216 of
this Act. Such assistance may be provided regardless of the
rank of such project on such list.]
(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.--A State shall establish a
system for providing financial assistance from the
water pollution control revolving fund of the State
under which the State--
(A) gives more 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
assets;
(iii) a financing plan indicating
sources of revenue from rate payers,
grants, bonds, other loans, and other
sources;
(iv) a review of options for
restructuring the treatment works; or
(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 amount of and direct
connections to impervious
surfaces;
(B) takes into consideration appropriate
chemical, physical, and biological data that
the State considers reasonably available and of
sufficient quality;
(C) provides for public notice and
opportunity to comment on establishment of the
system and the summary under subparagraph (D);
(D) publishes 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 such
information is available; and
(E) ensures that projects undertaken with
assistance under this title are designed to
achieve, in the estimation of the State, the
optimum water quality management, consistent
with the public health and water quality goals
and requirements of this title.
[(h)] (i) Eligibility of Non-Federal Share of Construction
Grant Projects.--A State water pollution control revolving fund
may provide assistance (other than under subsection (d)(1) of
this section) to a municipality or intermunicipal or interstate
agency with respect to the non-Federal share of the costs of a
treatment works project for which such municipality or agency
is receiving assistance from the Administrator under any other
authority only if such assistance is necessary to allow such
project to proceed.
(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)).
(k) Set-aside.--
(1) $3,000,000,000 or less made available.--
(A) In general.--In the case of a fiscal
year for which appropriations for State
revolving loan funds do not exceed
$3,000,000,000, a State shall set aside 10
percent of the capitalization grant of the
State under section 601(a) to provide grants to
eligible users described in subsection (c) in
the amount of not more than 55 percent of the
total cost of a project for which a grant is
made.
(B) Waiver.--A State may waive the
requirement of subparagraph (A) if the average
time for processing loan applications during
the preceding 12 months did not exceed 90 days.
(2) More than $3,000,000,000 made available.--In
the case of a fiscal year for which appropriations for
State revolving loan funds exceed $3,000,000,000, a
State shall set aside not more than 10 nor less than 5
percent of the State revolving loan fund of the State.
* * * * * * *
SEC. 604. ALLOTMENT OF FUNDS.
[(a) Formula.--Sums authorized to be appropriated to carry
out this section for each of fiscal years 1989 and 1990 shall
be allotted by the Administrator in accordance with section
205(c) of this Act.]
(a) Definitions.--In this subsection:
(1) Base formula.--The term `base formula' means
the formula for the allotment of funds made available
to carry out this section for a fiscal year to States
in accordance with section 205(c)(3).
(2) Needs survey.--The term `needs survey' means a
needs survey conducted under section 516(2).
(3) Needs survey percentage.--The term `needs
survey percentage', with respect to a State, means the
percentage applicable to the State under a formula for
the allotment of funds made available to carry out this
section for a fiscal year to States in amounts
determined by the Administrator based on the ratio
that--
(A) the needs of a State described in
categories I through VII of the most recent
needs survey; bears to
(B) the needs of all States described in
categories I through VII of the most recent
needs survey.
(4) Next needs survey.--The term `next needs
survey' means the first needs survey that is completed
after the 2000 needs survey.
(5) State.--The term `State' means a State, the
District of Columbia, and the Commonwealth of Puerto
Rico.
(b) Allocation of Funds.--
(1) In general.--Funds made available to carry out
this section for a fiscal year shall be allocated by
the Administrator in accordance with this subsection.
(2) Indian tribes.--Of the total amount of funds
available, 1.5 percent shall be allocated to Indian
tribes (within the meaning of section 518(c)).
(3) Certain territories and freely associated
states.--Of the total amount of funds made available,
0.25 percent shall be allocated to Guam, the United
States Virgin Islands, American Samoa, the Commonwealth
of the Northern Mariana Islands, the Federated States
of Micronesia, the Republic of the Marshall Islands,
and the Republic of Palau to be allocated among those
territories and freely associated states, as determined
by the Administrator.
(4) States.--
(A) Target allocation.--Each State shall
have a target allocation that--
(i) in the case of a State for
which the needs survey percentage is
less than 1.0 percent, shall be 1.0
percent; and
(ii) in the case of any other
State, shall be the needs survey
percentage.
(B) Limitation on growth.--
(i) Applicability.--This
subparagraph applies with respect to
any fiscal year for which the amount of
funds made available to carry out this
section is $3,150,000,000 or less.
(ii) States with a needs survey
percentage of 1.0 percent or less.--In
the case of a State for which the needs
survey percentage is 1.0 percent or
less, the growth in allocation in
dollar terms relative to the base
formula shall be limited to--
(I) 12 percent for fiscal
year 2005;
(II) 16 percent for fiscal
year 2006;
(III) 20 percent for fiscal
year 2007;
(IV) 24 percent for fiscal
year 2008; and
(V) 28 percent for fiscal
year 2009 and each fiscal year
thereafter.
(iii) States with a needs survey
percentage of greater than 1.0
percent.--In the case of a State for
which the needs survey percentage is
greater than 1.0 percent, the growth in
allocation in dollar terms relative to
the base formula shall be limited to
0.0 percent (before an allocation, if
any, is made under subparagraph (D)).
(C) Limitation on loss.--
(i) States with a needs survey
percentage of 1.0 percent or less.--A
dollar amount that is not less than the
dollar amount under the base formula
shall be allocated to States described
in subparagraph (A)(i).
(ii) States for which the needs
survey percentage is greater than 1.0
percent.--A dollar amount that is equal
to the dollar amount under the base
formula shall be allocated to States
described in subparagraph (A)(ii)
(before an allocation, if any, is made
under subparagraph (D)) that--
(I) in the most recent
needs survey, reported higher
needs in both categories V and
VII than the State reported in
the previous needs survey;
(II) grew in population by
more than 10 percent between
the 1990 decenniel census and
the 2000 decenniel census; or
(III) has a population
equal to 4 percent or more of
the total population of the
United States, as reported in
the 2000 decenniel census.
(D) Unallocated balance.--
(i) Less than $1,380,000,000 made
available.--For a fiscal year for which
less than $1,380,000,000 is made
available to carry out this section,
the unallocated balance of available
funds shall be allocated in equal
amounts to all States that, in the most
recent needs survey, report higher
total needs both in absolute dollar
terms and as a percentage of the total
United States needs.
(ii) $1,380,000,000 or more made
available.--For a fiscal year for which
$1,380,000,000 or more is made
available to carry out this section,
the unallocated balance of available
funds shall be allocated in equal
amounts to all States that--
(I) are described in clause
(i); or
(II) are described in
subparagraph (C).
[(b)] (c) Reservation of Funds for Planning.--Each State
shall reserve each fiscal year 1 percent of the sums allotted
to such State under this section for such fiscal year, or
$100,000, whichever amount is greater, to carry out planning
under sections 205(j) and 303(e) of this Act.
[(c)] (d) Allotment Period.--
(1) Period of availability for grant award.--Sums
allotted to a State under this section for a fiscal
year shall be available for obligation by the State
during the fiscal year for which sums are authorized
and during the following fiscal year.
(2) Reallotment of unobligated funds.--The amount
of any allotment not obligated by the State by the last
day of the 2-year period of availability established by
paragraph (1) shall be immediately reallotted by the
Administrator on the basis of the same ratio as is
applicable to sums allotted under title II of this Act
for the second fiscal year of such 2-year period. None
of the funds reallotted by the Administrator shall be
reallotted to any State which has not obligated all
sums allotted to such State in the first fiscal year of
such 2-year period.
(f) Reservation of Funds for Planning.--A State shall
reserve to carry out planning under sections 205(j) and 303(e)
for each fiscal year the greater of--
(1) 2 percent of the amount allocated to the State
under this section for the fiscal year; or
(2) $100,000.
* * * * * * *
[SEC. 607. AUTHORIZATION OF APPROPRIATIONS.
[There is authorized to be appropriated to carry out the
purposes of this title the following sums:
[(1) $1,200,000,000 per fiscal year for each of
fiscal year 1989 and 1990;
[(2) $2,400,000,000 for fiscal year 1991;
[(3) $1,800,000,000 for fiscal year 1992;
[(4) $1,200,000,000 for fiscal year 1993; and
[(5) $600,000,000 for fiscal year 1994.]
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 2005
and 2006;
(2) $3,600,000,000 for fiscal year 2007;
(3) $4,000,000,000 for fiscal year 2008; and
(4) $6,000,000,000 for fiscal year 2009.
(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).
* * * * * * *
TITLE VII--MISCELLANEOUS
SEC. 701. SEWAGE CONTROL TECHNOLOGY GRANT PROGRAM.
(a) Definition of Eligible Facility.--In this section, the
term `eligible facility' means a municipal wastewater treatment
plant that--
(1) as of the date of enactment of this title, has
a permitted design capacity to treat an annual average
of at least 500,000 gallons of wastewater per day; and
(2) is located within the Chesapeake Bay watershed
in any of the States of Delaware, Maryland, New York,
Pennsylvania, Virginia, or West Virginia or in the
District of Columbia.
(b) Grant Program.--
(1) Establishment.--Not later than 1 year after the
date of enactment of this title, the Administrator
shall establish a program within the Environmental
Protection Agency to provide grants to States and
municipalities to upgrade eligible facilities with
nutrient removal technologies.
(2) Priority.--In providing a grant under paragraph
(1), the Administrator shall--
(A) consult with the Chesapeake Bay Program
Office;
(B) give priority to eligible facilities at
which nutrient removal upgrades would--
(i) produce the greatest nutrient
load reductions at points of discharge;
or
(ii) result in the greatest
environmental benefits to local bodies
of water surrounding, and the main stem
of, the Chesapeake Bay; and
(C) take into consideration the geographic
distribution of the grants.
(3) Application.--
(A) In general.--On receipt of an
application from a State or municipality for a
grant under this section, if the Administrator
approves the request, the Administrator shall
transfer to the State or municipality the
amount of assistance requested.
(B) Form.--An application submitted by a
State or municipality under subparagraph (A)
shall be in such form and shall include such
information as the Administrator may prescribe.
(4) Use of funds.--A State or municipality that
receives a grant under this section shall use the grant
to upgrade eligible facilities with nutrient removal
technologies that are designed to reduce total nitrogen
in discharged wastewater to an average annual
concentration of 4 milligrams per liter.
(5) Cost sharing.--
(A) Federal share.--The Federal share of
the cost of upgrading any eligible facility
described in paragraph (1) using funds provided
under this section shall not exceed 55 percent.
(B) Non-federal share.--The non-Federal
share of the costs of upgrading any eligible
facility described in paragraph (1) using funds
provided under this section may be provided in
the form of funds made available to a State or
municipality under--
(i) any provision of this Act other
than this section (including funds made
available from a State revolving fund
established under title VI); or
(ii) any other Federal or State
law.
(c) Authorization of Appropriations.--
(1) In general.--There is authorized to be
appropriated to carry out this section $100,000,000 for
each of fiscal years 2005 through 2009, to remain
available until expended.
(2) Administrative costs.--The Administrator may
use not to exceed 4 percent of any amount made
available under paragraph (1) for a fiscal year to pay
administrative costs incurred in carrying out this
section.
* * * * * * *
----------
[42 U.S.C. 300F--JUL. 1, 1944]
SAFE DRINKING WATER ACT
* * * * * * *
SHORT TITLE
Sec. 1400. This title may be cited as the ``Safe Drinking
Water Act''.
* * * * * * *
Part A--Definitions
definitions
Sec. 1401. * * *
(14) The term ``Indian Tribe'' means any Indian
tribe having a Federally recognized governing body
carrying out substantial governmental duties and powers
over any area. For purposes of section [1452,] 1452 and
part G, the term includes any Native village (as
defined in section 3(c) of the Alaska Native Claims
Settlement Act (43 U.S.C. 1602(c))).
* * * * * * *
Sec. 1420. * * *
* * * * * * *
(g) Environmental Finance Centers.--
(1) In general.--The Administrator shall provide
initial funding for one or more university-based
environmental finance centers for activities that
provide technical assistance to State and local
officials in developing the capacity of public water
systems. Any such funds shall be used only for
activities that are directly related to this title.
(2) National capacity development clearinghouse.--
The Administrator shall establish a national public
water system capacity development clearinghouse to
receive and disseminate information with respect to
developing, improving, and maintaining financial and
managerial capacity at public water systems. The
Administrator shall ensure that the clearinghouse does
not duplicate other federally supported clearinghouse
activities.
(3) Capacity development techniques.--The
Administrator may request an environmental finance
center funded under paragraph (1) to develop and test
managerial, financial, and institutional techniques for
capacity development. The techniques may include
capacity assessment methodologies, manual and computer
based public water system rate models and capital
planning models, public water system consolidation
procedures, and regionalization models.
[(4) Authorization of appropriations.--There are
authorized to be appropriated to carry out this
subsection $1,500,000 for each of the fiscal years 1997
through 2003.]
(4) Authorization of appropriations.--There is
authorized to be appropriated to carry out this
subsection $2,000,000 for each of fiscal years 2005
through 2009.
(5) Limitation.--No portion of any funds made
available under this subsection may be used for
lobbying expenses.
* * * * * * *
RESEARCH, TECHNICAL ASSISTANCE, INFORMATION, TRAINING OF PERSONNEL
Sec. 1442. * * *
* * * * * * *
(e) Technical Assistance.--[The Administrator may provide]
(1) In general.--The Administrator may provide
technical assistance to small public water systems to
enable such systems to achieve and maintain compliance
with applicable national primary drinking water
regulations. Such assistance may include circuit-rider
and multi-State regional technical assistance programs,
training, and preliminary engineering evaluations. The
Administrator shall ensure that technical assistance
pursuant to this subsection is available in each State.
Each nonprofit organization receiving assistance under
this subsection shall consult with the State in which
the assistance is to be expended or otherwise made
available before using assistance to undertake
activities to carry out this subsection. There are
authorized to be appropriated to the Administrator to
be used for such technical assistance $15,000,000 for
each of the fiscal years 1997 through 2003. No portion
of any State loan fund established under section 1452
(relating to State loan funds) and no portion of any
funds made available under this subsection may be used
for lobbying expenses. Of the total amount appropriated
under this subsection, 3 percent shall be used for
technical assistance to public water systems owned or
operated by Indian Tribes.
(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 2005 through 2009.
* * * * * * *
[(m) Authorization of Appropriations.--There are authorized
to be appropriated to carry out the purposes of this section
$599,000,000 for the fiscal year 1994 and $1,000,000,000 for
each of the fiscal years 1995 through 2003. To the extent
amounts authorized to be appropriated under this subsection in
any fiscal year are not appropriated in that fiscal year, such
amounts are authorized to be appropriated in a subsequent
fiscal year (prior to the fiscal year 2004). Such sums shall
remain available until expended.]
(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 2005;
(B) $2,000,000,000 for each of fiscal years
2006 and 2007;
(C) $3,500,000,000 for fiscal year 2008;
and
(D) $6,000,000,000 for fiscal year 2009.
(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 for each fiscal year
to pay the costs of conducting needs surveys under
subsection (h).
* * * * * * *
general provisions
Sec. 1450. * * *
* * * * * * *
[(e) The Administrator shall take such action as may be
necessary to assure compliance with provisions of the Act of
March 3, 1931 (known as the Davis-Bacon Act; 40 U.S.C. 276a-
276a(5)). The Secretary of Labor]
(e) Labor Standards.--
(1) In general.--The Administrator shall take such
action as is necessary to ensure that all laborers and
mechanics employed by contractors and subcontractors on
construction projects financed, in whole or in part, by
a grant, loan, loan guarantee, refinancing, or any
other form of assistance provided under this title
(including assistance provided from the State drinking
water revolving fund under section 1452) are paid wages
at rates that are not less than the rates prevailing
for the same type of work for similar construction in
the immediate locality, as determined by the Secretary
of Labor in accordance with the Act of March 3, 1931
(40 U.S.C. 276a et seq.).
(2) Authority and functions.--The Secretary of
Labor shall have, with respect to the labor standards
specified in this subsection, the authority and
functions set forth in Reorganization Plan Numbered 14
of 1950 (15 F.R. 3176; 64 Stat. 1267) and section 2 of
the Act of June 13, 1934 (40 U.S.C. 276c).
* * * * * * *
STATE REVOLVING LOAN FUNDS
Sec. 1452. (a) General Authority.--
* * * * * * *
(2) Use of funds.--Except as otherwise authorized
by this title, amounts deposited in a State loan fund,
including loan repayments and interest earned on such
amounts, shall be used only for providing loans or loan
guarantees, or as a source of reserve and security for
leveraged loans, the proceeds of which are deposited in
a State loan fund established under paragraph (1), or
other financial assistance authorized under this
section to community water systems and nonprofit
noncommunity water systems, other than systems owned by
Federal agencies. Financial assistance under this
section may be used by a public water system only for
expenditures [(not] (including expenditures for
planning, design, and associated preconstruction and
for recovery for siting of the facility and related
elements but not including monitoring, operation, and
maintenance expenditures) of a type or category which
the Administrator has determined, through guidance,
will facilitate compliance with national primary
drinking water regulations applicable to the system
under section 1412 or otherwise significantly further
the health protection objectives of this title. The
funds may also be used to provide loans to a system
referred to in section 1401(4)(B) for the purpose of
providing the treatment described in section
1401(4)(B)(i)(III). The funds shall not be used for the
acquisition of real property or interests therein,
unless the acquisition is integral to a project
authorized by this paragraph and the purchase is from a
willing seller. Of the amount credited to any State
loan fund established under this section in any fiscal
year, 15 percent shall be available solely for
providing loan assistance to public water systems which
regularly serve fewer than 10,000 persons to the extent
such funds can be obligated for eligible projects of
public water systems 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.
* * * * * * *
(b) Intended Use Plans.--
(1) In general.--After providing for public review
and comment, each State that has entered into a
capitalization agreement pursuant to this section shall
annually prepare a plan that identifies the intended
uses of the amounts available to the State loan fund of
the State.
(2) Contents.--An intended use plan shall include--
(A) a list of the projects to be assisted
in the first fiscal year that begins after the
date of the plan, including a description of
the project, the expected terms of financial
assistance, and the size of the community
served;
(B) the criteria and methods established
for the distribution of funds; and
(C) a description of the financial status
of the State loan fund and the short-term and
long-term goals of the State loan fund.
(3) Use of funds.--
[(A) In general.--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 the requirements of
this title (including requirements for
filtration); and
[(iii) assist systems most in need
on a per household basis according to
State affordability criteria.]
(A) Definitions.--In this paragraph:
(i) Restructuring.--The term
`restructuring' means changes in
operations (including ownership,
accounting, rates, maintenance,
consolidation, and alternative water
supply).
(ii) Traditional approach.--The
term `traditional approach' means a
managed system used to treat and
distribute drinking water to an entire
service area consisting of a
centralized water system using
biological, physical, or chemical
treatment processes.
(B) Priority system.--An intended use plan
shall provide, to the maximum extent
practicable, that--
(i) priority for the use of funds
be given to projects--
(I) that address the most
serious risk to human health;
(II) that are necessary to
ensure compliance with the
requirements of this title
(including requirements for
filtration); and
(III) that assist systems
most in need on a per-household
basis according to State
affordability criteria; and
(ii) the State shall give more
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--
(I) an inventory of assets,
including a description of the
condition of those assets;
(II) a schedule for
replacement of assets;
(III) a financing plan
indicating sources of revenue
from rate payers, grants,
bonds, other loans, and other
sources;
(IV) a review of options
for restructuring the public
water system; or
(V) a review of options for
approaches other than a
traditional approach.
[(B)] (C) List of projects.--Each State
shall, after notice and opportunity for public
comment, publish and [periodically] at least
biennially update a list of projects in the
State that are eligible for assistance under
this section, including the priority assigned
to each project and, to the extent known, the
expected funding schedule for each project.
* * * * * * *
(d) Assistance for Disadvantaged Communities.--
* * * * * * *
(3) Definition of disadvantaged community.--In this
subsection, the term ``disadvantaged community'' means
the service area , or portion of a service area, of a
public water system that meets affordability criteria
established after public review and comment by the
State in which the public water system is located. The
Administrator may publish information to assist States
in establishing affordability criteria.
* * * * * * *
(g) Administration of State Loan Funds.--
(1) Combined financial administration.--
Notwithstanding subsection (c), a State may (as a
convenience and to avoid unnecessary administrative
costs) combine, in accordance with State law, the
financial administration of a State loan fund
established under this section with the financial
administration of any other revolving fund established
by the State if otherwise not prohibited by the law
under which the State loan fund was established and if
the Administrator determines that--
(A) the grants under this section, together
with loan repayments and interest, will be
separately accounted for and used solely for
the purposes specified in subsection (a); and
(B) the authority to establish assistance
priorities and carry out oversight and related
activities (other than financial
administration) with respect to assistance
remains with the State agency having primary
responsibility for administration of the State
program under section 1413, after consultation
with other appropriate State agencies (as
determined by the State): Provided, That in
nonprimacy States eligible to receive
assistance under this section, the Governor
shall determine which State agency will have
authority to establish priorities for financial
assistance from the State loan fund.
(2) Cost of administering fund.--Each State may
annually use up to [4] 6 percent of the funds allotted
to the State under this section to cover the reasonable
costs of administration of the programs under this
section, including the recovery of reasonable costs
expended to establish a State loan fund which are
incurred after the date of enactment of this section,
and to provide technical assistance to public water
systems within the State. For fiscal year 1995 and each
fiscal year thereafter, each State may use up to an
additional 10 percent of the funds allotted to the
State under this section--
(A) for public water system supervision
programs under section 1443(a);
(B) to administer or provide technical
assistance through source water protection
programs;
(C) to develop and implement a capacity
development strategy under section 1420(c); and
(D) for an operator certification program
for purposes of meeting the requirements of
section [1419, if the State matches the
expenditures with at least an equal amount of
State funds. At least half of the match must be
additional to the amount expended by the State
for public water supervision in fiscal year
1993.] 1419. An additional 2 percent of the
funds annually allotted to each State under
this section may be used by the State to
provide technical assistance to public water
systems serving 10,000 or fewer persons in the
State. Funds utilized under subparagraph (B)
shall not be used for enforcement actions.
(3) Guidance and regulations.--The Administrator
shall publish guidance and promulgate regulations as
may be necessary to carry out the provisions of this
section, including--
(A) provisions to ensure that each State
commits and expends funds allotted to the State
under this section as efficiently as possible
in accordance with this title and applicable
State laws;
(B) guidance to prevent waste, fraud, and
abuse; and
(C) guidance to avoid the use of funds made
available under this section to finance the
expansion of any public water system in
anticipation of future population growth.
The guidance and regulations shall also ensure that the
States, and public water systems receiving assistance
under this section, use accounting, audit, and fiscal
procedures that conform to generally accepted
accounting standards.
(4) State report.--Each State administering a loan
fund and assistance program under this subsection shall
publish and submit to the Administrator a report every
2 years on its activities under this section, including
the findings of the most recent audit of the fund and
the entire State allotment. The Administrator shall
periodically audit all State loan funds established by,
and all other amounts allotted to, the States pursuant
to this section in accordance with procedures
established by the Comptroller General.
(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)).
* * * * * * *
(k) Other Authorized Activities.--
(2) Limitation.--For each fiscal year, the total
amount of assistance provided and expenditures made by
a State under this subsection may not exceed 15 percent
of the amount of the capitalization grant received by
the State for that year and may not exceed 10 percent
of that amount for any one of the following activities:
(A) To acquire land or conservation
easements pursuant to paragraph (1)(A)(i).
(B) To provide funding to implement
voluntary, incentive-based source water quality
protection measures pursuant to clauses (ii)
and (iii) of paragraph (1)(A).
(C) To provide assistance through a
capacity development strategy pursuant to
paragraph (1)(B).
(D) To make expenditures to delineate or
assess source water protection areas pursuant
to paragraph (1)(C) (including implementation
of source water protection plans).
* * * * * * *
(s) Set-Aside.--
(1) $2,500,000,000 or less made available.--
(A) In general.--In the case of a fiscal
year for which appropriations for State
revolving loan funds do not exceed
$2,500,000,000, a State shall set aside 10
percent of the capitalization grant of the
State under subsection (a) to provide grants to
projects eligible for assistance under
subsection (a)(2) of not more than 55 percent
of the total cost of a project for which a
grant is made.
(B) Waiver.--A State may waive the
requirement of subparagraph (A) if the average
time for processing loan applications during
the preceding 12 months did not exceed 90 days.
(2) More than $2,500,000,000 made available.--In
the case of a fiscal year for which appropriations for
State revolving loan funds exceed $2,500,000,000, a
State shall set aside not more than 5 nor less than 2.5
percent of the State revolving loan fund of the State.
* * * * * * *
LEAD CONTAMINATION IN SCHOOL DRINKING WATER
Sec. 1464
* * * * * * *
[(d) Remedial Action Program.--
[(1) Testing and remedying lead contamination.--
Within 9 months after the enactment of this section,
each State shall establish a program, consistent with
this section, to assist local educational agencies in
testing for, and remedying, lead contamination in
drinking water from coolers and from other sources of
lead contamination at schools under the jurisdiction of
such agencies.
[(2) Public availability.--A copy of the results of
any testing under paragraph (1) shall be available in
the administrative offices of the local educational
agency for inspection by the public, including
teachers, other school personnel, and parents. The
local educational agency shall notify parent, teacher,
and employee organizations of the availability of such
testing results.
[(3) Coolers.--In the case of drinking water
coolers, such program shall include measures for the
reduction or elimination of lead contamination from
those water coolers which are not lead free and which
are located in schools. Such measures shall be adequate
to ensure that within 15 months after the enactment of
this subsection all such water coolers in schools under
the jurisdiction of such agencies are repaired,
replaced, permanently removed, or rendered inoperable
unless the cooler is tested and found (within the
limits of testing accuracy) not to contribute lead to
drinking water.]
(d) Removal of Lead in Schools.--
(1) In general.--Not later than 270 days after the
date of enactment of the Water Infrastructure Financing
Act, in consultation with each State, the Administrator
shall establish a program to provide grants to States
to assist in paying, or to provide reimbursement for,
costs incurred by local educational agencies in testing
for, remediating, and informing students, parents,
teachers, and employees about lead contamination in
drinking water from coolers and from other sources of
lead contamination at schools under the jurisdiction of
the local educational agencies.
(2) Funding.--
(A) Authorization of appropriations.--There
is authorized to be appropriated to carry out
this subsection $40,000,000 for each of fiscal
years 2005 through 2008.
(B) Administrative expenses.--The
Administrator may use not more than 5 percent
of amounts made available under subparagraph
(A) for a fiscal year to pay administrative
expenses incurred in carrying out this
subsection.
[FEDERAL ASSISTANCE FOR STATE PROGRAMS REGARDING LEAD CONTAMINATION IN
SCHOOL DRINKING WATER
[Sec. 1465. (a) School Drinking Water Programs.--The
Administrator shall make grants to States to establish and
carry out State programs under section 1464 to assist local
educational agencies in testing for, and remedying, lead
contamination in drinking water from drinking water coolers and
from other sources of lead contamination at schools under the
jurisdiction of such agencies. Such grants may be used by
States to reimburse local educational agencies for expenses
incurred after the enactment of this section for such testing
and remedial action.
[(b) Limits.--Each grant under this section shall be used
by the State for testing water coolers in accordance with
section 1464, for testing for lead contamination in other
drinking water supplies under section 1464, or for remedial
action under State programs under section 1464. Not more than 5
percent of the grant may be used for program administration.
[(c) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this section not more than
$30,000,000 for fiscal year 1989, $30,000,000 for fiscal year
1990, and $30,000,000 for fiscal year 1991.]
SEC. 1465. LEAD CONTAMINATION IN DRINKING WATER IN THE DISTRICT OF
COLUMBIA.
(a) Grant.--
(1) In general.--The Administrator may provide to
the District of Columbia a grant of $20,000,000 to be
used to address lead contamination in the water supply
of the District of Columbia.
(2) Use of grant funds.--Funds provided under
paragraph (1) may be used for activities such as--
(A) assessment of infrastructure (which may
include, on a voluntary basis, fixtures within
private residences, including replacement
faucet strainers);
(B) testing of water supplies throughout
the water system;
(C) distribution of filters to residences
with high lead levels;
(D) evaluation of chemical additives
(including zinc orthophosphate) to the water
supply;
(E) pipe replacement; and
(F) evaluation and improvement of
communication with the general public,
particularly households with water that tested
above the action level for lead.
(3) Authorization of appropriations.--There is
authorized to be appropriated to carry out this
subsection $20,000,000.
(b) Study by the National Academy of Sciences.--
(1) In general.--The Administrator shall contract
with the National Academy of Sciences to conduct a 2-
phase study in accordance with this subsection.
(2) Phase i.--In phase I of the study, the National
Academy of Sciences shall conduct a comprehensive
evaluation of--
(A) compliance by the District of Columbia
Water and Sewer Authority with regulations
pertaining to lead and copper in drinking water
(including meeting the public notification
requirements of the regulations); and
(B) the potential causes of lead in the
water supply of the District of Columbia.
(3) Phase ii.--In phase II of the study, the
National Academy of Sciences shall assess, from a
cross-section of cities of varying population sizes
across the United States with lead service lines--
(A) the extent to which water levels in
those cities have exceeded the action level for
lead; and
(B) the potential causes of the exceedences
(including service lines, chemical additives in
the water supply, equipment upgrades, and pipes
in residences).
(4) Report.--Not later than 1 year after the date
of enactment of this paragraph, 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 made in the study.
(5) Authorization of appropriations.--There is
authorized to be appropriated to carry out this
subsection $2,000,000.
* * * * * * *
PART G--SMALL PUBLIC WATER SYSTEM ASSISTANCE\1\
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\1\Note: This bill, as amended by the committee, includes different
provisions for Sections 1471-1474.
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SEC. 1471. DEFINITIONS.
In this part:
(1) Eligible activity.--
(A) In general.--The term ``eligible
activity'' means an activity that is carried
out by an eligible entity to ensure compliance
with national primary drinking water
regulations applicable to the eligible entity
under section 1412.
(B) Inclusion.--The term ``eligible
activity'' includes source water protection.
(C) Exclusion.--The term ``eligible
activity'' does not include any activity to
increase the population served by a public
water system, except to the extent that the
Administrator determines an activity to be
necessary to--
(i) achieve compliance with a
national primary drinking water
regulation; and
(ii) provide a water supply to a
population that, as of the date of
enactment of this part, is not served
by a safe public water system.
(2) Eligible entity.--The term ``eligible entity''
means--
(A) a small public water system that--
(i) if located in a State, serves a
community that, under affordability
criteria established by the State under
section 1452(d), is determined by the
State to be--
(I) a disadvantaged
community; or
(II) a community that would
otherwise become a
disadvantaged community as a
result of carrying out an
eligible activity, as
determined by the State; or
(ii) if located in an area governed
by an Indian Tribe, serves a community
that is determined by the
Administrator, under criteria published
by the Administrator under section
1452(d) and in consultation with the
Secretary, to be--
(I) a disadvantaged
community; or
(II) a community that would
otherwise become a
disadvantaged community as a
result of carrying out an
eligible activity, as
determined by the State; and
(B) a public water system that--
(i) would incur $3,000,000 or more
in costs in complying with national
primary drinking water regulations
promulgated under this Act; and
(ii) is a disadvantaged community
or a community may otherwise become
disadvantaged as a result of carrying
out an eligible activity, as determined
by the State.
(3) Program.--The term ``program'' means the small
public water system assistance program established
under section 1472(a).
(4) Secretary.--The term ``Secretary'' means the
Secretary of Health and Human Services, acting through
the Director of the Indian Health Service.
(5) Small public water system.--The term ``small
public water system'' means a public water system
(including a community water system and a noncommunity
water system) that serves a population of 15,000 or
fewer individuals.
SEC. 1472. SMALL PUBLIC WATER SYSTEM ASSISTANCE PROGRAM.
(a) Establishment.--Not later than July 1, 2006, the
Administrator shall establish within the Environmental
Protection Agency a small public water system assistance
program for, and provide grants to, eligible entities for use
in carrying out eligible activities.
(b) Priority.--
(1) In general.--The Administrator shall provide
grants to eligible entities for eligible activities
that--
(A) address the most serious risks to human
health from lack of compliance with the
regulations specified in subparagraph (B);
(B) are necessary to ensure compliance with
national primary drinking water regulations
applicable to eligible entities under section
1412; and
(C) assist systems serving communities that
are most in need, as calculated on the basis of
median household income, under affordability
criteria established by the State under section
1452(d) (or, in the case of eligible entities
in an area governed by an Indian Tribe, under
affordability criteria established by the
Administrator, in consultation with the
Secretary).
(2) Management cooperatives.--The Administrator
shall consider giving priority for grants under this
section to eligible activities that are carried out by
communities that form management cooperatives.
(d) Technical Assistance.--In providing grants under this
section, the Administrator shall--
(1) use not less than 1.5 percent of funds made
available to carry out this section to provide grants
to nonprofit technical assistance organizations to be
used to assist eligible entities in--
(A) assessing needs relating to eligible
activities;
(B) identifying additional available
sources of funding to meet the cost-sharing
requirements under the program; and
(C) planning, implementing, and maintaining
any eligible activities of the eligible
entities that receive funding under this
section;
(2) require that none of the funds provided under
paragraph (1) be used to pay for lobbying expenses; and
(3) require that for each fiscal year, not more
than 5 percent of the funds received by an eligible
entity under this section may be used to obtain
technical assistance in planning, implementing, and
maintaining eligible activities for which funding is
provided under this section.
(e) Indian Tribes.--
(1) In general.--In providing grants under this
section, the Administrator shall use not less than 3
percent of funds made available to carry out this
section for each fiscal year to provide grants to
eligible entities that are located in areas governed by
Indian Tribes.
(2) Program priority requirement.--
(A) List of eligible activities.--
(i) In general.--The Administrator,
in consultation with the Secretary,
shall, for each fiscal year, identify,
and, consistent with subsection (b) and
considering the criteria described in
subparagraph (B), list in descending
order of priority, eligible activities
for eligible entities located in areas
governed by Indian Tribes for which
funds provided from a grant under this
part may be used.
(ii) Coordination.--
(I) In general.--To the
maximum extent practicable, the
Administrator shall ensure that
the preparation of the list
under clause (i) is coordinated
with any needs assessment
conducted under section
1452(i)(4).
(II) Additional
consideration.--Any additional
financial needs of small public
water systems located in areas
governed by Indian Tribes that
are associated with the cost of
complying with a national
primary drinking water
regulation (including a
regulation concerning arsenic)
that is promulgated after the
then most recent needs survey
conducted under section
1452(i)(4) shall be factored
into the determination of
financial need for, and
prioritization of, eligible
activities under this section.
(B) Criteria.--The Administrator shall, in
preparing a list under subparagraph (A),
consider giving priority to any listed eligible
activities that are to be carried out by
communities that form management cooperatives
(including management cooperatives between
systems that do not have public water system
connections).
(3) Allocation of grant funding.--For each fiscal
year, the Administrator, in consultation with the
Secretary, shall provide grants to eligible entities
located in an area governed by an Indian Tribe for the
maximum number of eligible activities for which the
funding allocation makes assistance available, based on
the priority assigned by the Administrator to eligible
activities under paragraph (2).
(4) Limitation on Use of Funds.--For each fiscal
year, not more than 5 percent of the funds received by
an eligible entity located in an area governed by an
Indian Tribe under this section may be used to obtain
technical assistance in planning, implementing, and
maintaining eligible activities that are funded under
this section.
(f) Limitation on Receipt of Funds.--An eligible entity may
receive a grant under this section only--
(1) if the Administrator determines that use of the
grant will aid compliance with national primary
drinking water regulations applicable to the eligible
entity under section 1412;
(2)(A) to restructure or consolidate the facility
to achieve compliance with applicable national primary
drinking water regulations; or
(B) in a case in which restructuring or
consolidation of the facility is not practicable, if
the Administrator determines that--
(i) the eligible entity has made a good
faith effort to achieve compliance with
applicable national primary drinking water
regulations; and
(ii) the eligible entity is adhering to an
enforceable schedule for complying with those
regulations; and
(3) if--
(A) the Administrator determines that an
eligible entity may lack the technical,
managerial, operations, maintenance, or
financial capacity to ensure compliance with
national primary drinking water regulations
applicable to the eligible entity under section
1412, and the eligible entity agrees to
undertake feasible and appropriate changes in
operations (including changes in ownership,
management, accounting, rates, maintenance,
consolidation, provision of an alternative
water supply, or other procedures); and
(B) the Administrator determines that the
measures are necessary to ensure that the
eligible entity has the technical, managerial,
operational, maintenance, and financial
capacity to comply with applicable national
primary drinking water regulations over the
long term.
(g) Cost Sharing.--
(1) In general.--
(A) Limit.--Except as provided in paragraph
(2), the share of the total cost of an eligible
activity funded by a grant under this section
shall not exceed 80 percent.
(B) Use of other federal funds.--To pay the
portion of an eligible activity that is not
funded by a grant under this section, an
eligible entity located in an area governed by
an Indian Tribe may use Federal financial
assistance other than assistance received under
this section.
(2) Waiver of cost-sharing requirement.--
(A) In general.--The Administrator may
waive the requirement of an eligible entity to
pay all or a portion of the share of an
eligible activity that is not funded by a grant
under this section, based on a determination by
the State that the eligible entity is unable to
pay any or all of the share.
(B) Limitation.--For each fiscal year, the
total amount of cost-share waivers provided by
the Administrator to eligible entities located
in an area governed by an Indian Tribe under
subparagraph (A) shall not exceed 30 percent of
the amount of funding used to provide grants to
Indian Tribes under this part.
(h) Unobligated Funds.--Any funds not obligated by the
small public water system assistance program established under
subsection (a) for an eligible activity within 1 year after the
date on which funds are made available to carry out this part
shall be returned to the Administrator for use in providing new
grants under this part.
SEC. 1473. REPORTS.
Not later than January 1, 2006, and annually thereafter
through January 1, 2010, the Administrator shall--
(1) 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
that, for the preceding fiscal year--
(A) lists the eligible activities for
eligible entities that receive funds under this
part for the preceding fiscal year;
(B) identifies the number of grants
provided under this part to eligible entities
located in areas governed by Indian Tribes, and
in each State;
(C) identifies each eligible entity that
receives a grant to carry out an eligible
activity;
(D) identifies the amount of each grant
provided to an eligible entity to carry out an
eligible activity; and
(E) describes each eligible activity funded
by such a grant (including the status of the
eligible activity); and
(2) make the report under paragraph (1) available
to the public.
SEC. 1474. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to carry out this
part $200,000,000 for each of fiscal years 2005 through 2009.
* * * * * * *
PART G--SMALL PUBLIC WATER SYSTEM ASSISTANCE\2\
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\2\Note: This bill, as amended by the committee, includes different
provisions for Sections 1471-1474.
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SEC. 1471. DEFINITIONS.
In this part:
(1) Eligible activity.--
(A) In general.--The term ``eligible
activity'' means an activity that is carried
out by an eligible entity to ensure compliance
with national primary drinking water
regulations applicable to the eligible entity
under section 1412.
(B) Inclusion.--The term ``eligible
activity'' includes source water protection.
(C) Exclusion.--The term ``eligible
activity'' does not include any activity to
increase the population served by a public
water system, except to the extent that the
Administrator determines an activity to be
necessary to--
(i) achieve compliance with a
national primary drinking water
regulation; and
(ii) provide a water supply to a
population that, as of the date of
enactment of this part, is not served
by a safe public water system.
(2) Eligible entity.--The term ``eligible entity''
means--
(A) a small public water system that--
(i) if located in a State, serves a
community that, under affordability
criteria established by the State under
section 1452(d), is determined by the
State to be--
(I) a disadvantaged
community; or
(II) a community that would
otherwise become a
disadvantaged community as a
result of carrying out an
eligible activity, as
determined by the State; or
(ii) if located in an area governed
by an Indian Tribe, serves a community
that is determined by the
Administrator, under criteria published
by the Administrator under section
1452(d) and in consultation with the
Secretary, to be--
(I) a disadvantaged
community; or
(II) a community that would
otherwise become a
disadvantaged community as a
result of carrying out an
eligible activity, as
determined by the State; and
(B) a public water system that--
(i) would incur $3,000,000 or more
in costs in complying with national
primary drinking water regulations
promulgated under this Act; and
(ii) is a disadvantaged community
or a community may otherwise become
disadvantaged as a result of carrying
out an eligible activity, as determined
by the State.
(3) Program.--The term ``program'' means the small
public water system assistance program established
under section 1472(a).
(4) Secretary.--The term ``Secretary'' means the
Secretary of Health and Human Services, acting through
the Director of the Indian Health Service.
(5) Small public water system.--The term ``small
public water system'' means a public water system
(including a community water system and a noncommunity
water system) that serves a population of 15,000 or
fewer individuals.
SEC. 1472. SMALL PUBLIC WATER SYSTEM ASSISTANCE PROGRAM.
(a) Establishment.--Not later than July 1, 2006, the
Administrator shall establish within the Environmental
Protection Agency a small public water system assistance
program for, and provide grants to, eligible entities for use
in carrying out eligible activities.
(b) Priority.--
(1) In general.--The Administrator shall provide
grants to eligible entities for eligible activities
that--
(A) address the most serious risks to human
health from lack of compliance with the
regulations specified in subparagraph (B);
(B) are necessary to ensure compliance with
national primary drinking water regulations
applicable to eligible entities under section
1412; and
(C) assist systems serving communities that
are most in need, as calculated on the basis of
median household income, under affordability
criteria established by the State under section
1452(d) (or, in the case of eligible entities
in an area governed by an Indian Tribe, under
affordability criteria established by the
Administrator, in consultation with the
Secretary).
(2) Management cooperatives.--The Administrator
shall consider giving priority for grants under this
section to eligible activities that are carried out by
communities that form management cooperatives.
(d) Technical Assistance.--In providing grants under this
section, the Administrator shall--
(1) use not less than 1.5 percent of funds made
available to carry out this section to provide grants
to nonprofit technical assistance organizations to be
used to assist eligible entities in--
(A) assessing needs relating to eligible
activities;
(B) identifying additional available
sources of funding to meet the cost-sharing
requirements under the program; and
(C) planning, implementing, and maintaining
any eligible activities of the eligible
entities that receive funding under this
section;
(2) require that none of the funds provided under
paragraph (1) be used to pay for lobbying expenses; and
(3) require that for each fiscal year, not more
than 5 percent of the funds received by an eligible
entity under this section may be used to obtain
technical assistance in planning, implementing, and
maintaining eligible activities for which funding is
provided under this section.
(e) Indian Tribes.--
(1) In general.--In providing grants under this
section, the Administrator shall use not less than 3
percent of funds made available to carry out this
section for each fiscal year to provide grants to
eligible entities that are located in areas governed by
Indian Tribes.
(2) Program priority requirement.--
(A) List of eligible activities.--
(i) In general.--The Administrator,
in consultation with the Secretary,
shall, for each fiscal year, identify,
and, consistent with subsection (b) and
considering the criteria described in
subparagraph (B), list in descending
order of priority, eligible activities
for eligible entities located in areas
governed by Indian Tribes for which
funds provided from a grant under this
part may be used.
(ii) Coordination.--
(I) In general.--To the
maximum extent practicable, the
Administrator shall ensure that
the preparation of the list
under clause (i) is coordinated
with any needs assessment
conducted under section
1452(i)(4).
(II) Additional
consideration.--Any additional
financial needs of small public
water systems located in areas
governed by Indian Tribes that
are associated with the cost of
complying with a national
primary drinking water
regulation (including a
regulation concerning arsenic)
that is promulgated after the
then most recent needs survey
conducted under section
1452(i)(4) shall be factored
into the determination of
financial need for, and
prioritization of, eligible
activities under this section.
(B) Criteria.--The Administrator shall, in
preparing a list under subparagraph (A),
consider giving priority to any listed eligible
activities that are to be carried out by
communities that form management cooperatives
(including management cooperatives between
systems that do not have public water system
connections).
(3) Allocation of grant funding.--For each fiscal
year, the Administrator, in consultation with the
Secretary, shall provide grants to eligible entities
located in an area governed by an Indian Tribe for the
maximum number of eligible activities for which the
funding allocation makes assistance available, based on
the priority assigned by the Administrator to eligible
activities under paragraph (2).
(4) Limitation on Use of Funds.--For each fiscal
year, not more than 5 percent of the funds received by
an eligible entity located in an area governed by an
Indian Tribe under this section may be used to obtain
technical assistance in planning, implementing, and
maintaining eligible activities that are funded under
this section.
(f) Limitation on Receipt of Funds.--
(1) In general.--Except as provided in paragraph
(2), a grant under this section shall not be provided
to an eligible entity that, as determined by the
Administrator--
(A) does not have the technical,
managerial, operations, maintenance, or
financial capacity to ensure compliance with
national primary drinking water regulations
applicable to the eligible entity under section
1412; or
(B) is in significant noncompliance with
any applicable national primary drinking water
regulation.
(2) Exception for receipt of grant.--An eligible
entity described in paragraph (1) may receive a grant
under this section only--
(A) if the Administrator determines that
use of the grant will ensure compliance with
national primary drinking water regulations
applicable to the eligible entity under section
1412;
(B)(i) to restructure or consolidate the
facility to achieve compliance with applicable
national primary drinking water regulations; or
(ii) in a case in which restructuring or
consolidation of the facility is not
practicable, if the Administrator determines
that--
(I) the eligible entity has made a
good faith effort to achieve compliance
with applicable national primary
drinking water regulations; and
(II) the eligible entity is
adhering to an enforceable schedule for
complying with those regulations; and
(C) in a case in which paragraph (1)(A)
applies to an eligible entity, and the eligible
entity if--
(i) the eligible entity agrees to
undertake feasible and appropriate
changes in operations (including
changes in ownership, management,
accounting, rates, maintenance,
consolidation, provision of an
alternative water supply, or other
procedures); and
(ii) the Administrator determines
that the measures are necessary to
ensure that the eligible entity has the
capacity described in paragraph (1)(A)
to comply with applicable national
primary drinking water regulations over
the long term.
(3) Review.--Before providing assistance under this
section to an eligible entity that is in significant
noncompliance with any national primary drinking water
regulation applicable to the eligible entity under
section 1412, the Administrator shall conduct a review
to determine whether paragraph (1)(A) applies to the
entity.
(g) Cost Sharing.--
(1) In general.--
(A) Limit.--Except as provided in paragraph
(2), the share of the total cost of an eligible
activity funded by a grant under this section
shall not exceed 80 percent.
(B) Use of other federal funds.--To pay the
portion of an eligible activity that is not
funded by a grant under this section, an
eligible entity located in an area governed by
an Indian Tribe may use Federal financial
assistance other than assistance received under
this section.
(2) Waiver of cost-sharing requirement.--
(A) In general.--The Administrator may
waive the requirement of an eligible entity to
pay all or a portion of the share of an
eligible activity that is not funded by a grant
under this section, based on a determination by
the State that the eligible entity is unable to
pay any or all of the share.
(B) Limitation.--For each fiscal year, the
total amount of cost-share waivers provided by
the Administrator to eligible entities located
in an area governed by an Indian Tribe under
subparagraph (A) shall not exceed 30 percent of
the amount of funding used to provide grants to
Indian Tribes under this part.
(h) Unobligated Funds.--Any funds not obligated by the
small public water system assistance program established under
subsection (a) for an eligible activity within 1 year after the
date on which funds are made available to carry out this part
shall be returned to the Administrator for use in providing new
grants under this part.
SEC. 1473. REPORTS.
Not later than January 1, 2006, and annually thereafter
through January 1, 2010, the Administrator shall--
(1) 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
that, for the preceding fiscal year--
(A) lists the eligible activities for
eligible entities that receive funds under this
part for the preceding fiscal year;
(B) identifies the number of grants
provided under this part to eligible entities
located in areas governed by Indian Tribes, and
in each State;
(C) identifies each eligible entity that
receives a grant to carry out an eligible
activity;
(D) identifies the amount of each grant
provided to an eligible entity to carry out an
eligible activity; and
(E) describes each eligible activity funded
by such a grant (including the status of the
eligible activity); and
(2) make the report under paragraph (1) available
to the public.
SEC. 1474. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to carry out this
part $1,000,000,000 for each of fiscal years 2005 through 2008.
* * * * * * *
----------
[42 U.S.C. 1962)--JUL. 22, 1965]
WATER RESOURCES PLANNING ACT
Short title
Section. 1. This Act may be cited as the ``Water Resources
Planning Act''.
* * * * * * *
Sec. 101. There is hereby established a Water Resources
Council (hereinafter referred to as the ``Council'') which
shall be composed of the Secretary of the Interior, the
Secretary of Agriculture, the Secretary of Homeland Security,
the Secretary of the Army, the Secretary of Commerce, the
Secretary of Housing and Urban Development, the Secretary of
Transportation, the Administrator of the Environmental
Protection Agency, and the Chairman of the Federal Power
Commission. The Chairman of the Council shall request the heads
of other Federal agencies to participate with the Council when
matters affecting their responsibilities are considered by the
Council. The Chairman of the Council shall be designated by the
President.
[Sec. 102. The Council shall--]
SEC. 102. DUTIES OF COUNCIL.
(a) In General.--The Council shall--
[(a)] (1) maintain a continuing study and prepare
an assessment biennially, or at such less frequent
intervals as the Council may determine, of the adequacy
of supplies of water necessary to meet the water
requirements in each water resource region in the
United States and the national interest therein; [and]
[(b)] (2) maintain a continuing study of the
relation of regional or river basin plans and programs
to the requirements of larger regions of the Nation and
of the adequacy of administrative and statutory means
for the coordination of the water and related land
resources policies and programs of the several Federal
agencies; it shall appraise the adequacy of existing
and proposed policies and programs to meet such
requirements; and it shall make recommendations to the
President with respect to Federal policies and
programs[.] ; and
(3) carry out a special water resources study in
accordance with subsection (b).
(b) Special Water Resources Study.--
(1) In general.--The Council shall carry out a
special water resources study to--
(A) use existing water assessments and
conduct such additional assessments as are
necessary to project future water supply and
demand;
(B) study water management programs used by
the Federal Government, State and local
governments, and private entities to increase
water supplies and improve the availability,
reliability, and quality of freshwater
resources;
(C) consult with agencies and entities to
develop recommendations consistent with laws
(including treaties, decrees, and compacts) for
a comprehensive water strategy that--
(i) respects the primary role of
States in regulating water rights and
uses;
(ii) identifies incentives to
ensure an adequate and dependable
supply of water through the year 2054;
(iii) suggests strategies to avoid
increased mandates on State and local
governments;
(iv) eliminates duplication and
conflict among Federal programs;
(v) considers all available
technologies and methods to optimize
water supply reliability, availability,
and quality, while safeguarding the
environment;
(vi) recommends means of capturing
excess water and flood water for
conservation and use in a drought;
(vii) suggests financing options
for--
(I) water supply and water
management projects; and
(II) appropriate public
works projects;
(viii) suggests strategies to
conserve existing water supplies,
including recommendations for repairing
aging infrastructure; and
(ix) includes other objectives
relating to the effective management of
the water supply to ensure reliability,
availability, and quality;
(D) evaluate Federal water programs in
existence on the date of enactment of this
paragraph and submit to Congress and the
President recommendations on--
(i) means of eliminating
discrepancies between the goals of the
programs and actual service delivery;
(ii) duplication among programs;
and
(iii) any other circumstances that
interfere with the effective operation
of the programs;
(E) based on a review of water plans,
develop and make available to the public water
planning models to reduce water resource
conflicts; and
(F) develop and coordinate public awareness
activities to provide the public with access to
understandable informational material,
including, at a minimum--
(i) descriptions of the value and
benefits of land stewardship to reduce
the impact of water shortages; and
(ii) clear instructions for
appropriate responses to water supply
shortages, including--
(I) water conservation;
(II) water reuse; and
(III) detection and
elimination of water leaks.
(2) Consultation.--In carrying out this subsection,
the Council shall consult with interested groups,
including groups that represent--
(A) agricultural production, wildlife, and
fishery interests;
(B) forestry and fire management interests;
(C) rural and urban water associations;
(D) environmental interests;
(E) engineering and construction interests;
(F) the portion of the scientific community
that is concerned with climatology and
hydrology;
(G) resource-dependent businesses and other
private entities (including the recreation and
tourism industries); and
(H) any other group, organization, or
entity that the Council considers necessary to
advance the work of the Council.
(3) Reports.--
(A) Interim reports.--Not later than 180
days after the first meeting of the Council
following the date of enactment of this
paragraph, and every 180 days thereafter, the
Council shall submit to the President, the
Committee on Energy and Natural Resources and
the Committee on the Environment and Public
Works of the Senate, and the Committee on
Resources, the Committee on Transportation and
Infrastructure, and the Committee on Energy and
Commerce of the House of Representatives an
interim report that describes the progress made
by the Council in carrying out this subsection.
(B) Final report.--As soon as practicable,
but not later than 3 years, after the date of
the first meeting of the Council referred to in
subparagraph (A), the Council shall submit to
the President and the Committees referred to in
subparagraph (A) a final report that includes--
(i) a detailed statement of the
findings and conclusions of the
Council; and
(ii) recommendations for
legislation and other policies to
implement those findings and
conclusions, including--
(I) a list of
recommendations that can be
implemented immediately in
accordance with existing law;
and
(II) a list of
recommendations that require
statutory changes prior to
implementation.
* * * * * * *
Sec. 401. There are authorized to be appropriated to the
Water Resources [Council:] Council each of the following
amounts:
[(a)] (1) The sum of $2,886,000 for fiscal year
1979 for the Federal share of the expenses of
administration and operation of river basin
commissions, including salaries and expenses of the
chairmen, but not including funds authorized by
[subsection (c) below:] paragraph (3): Provided, That
not more than $750,000 annually shall be available
under this subsection for any single river basin
commission[;[ .
[(b)] (2) [the sum] The sum of $2,668,000 for
fiscal year 1979 for the expenses of the Water
Resources Council in administering this Act, not
including funds authorized by [subsection (c) below[;]
paragraph (3).
[(c)] (3) The sum of $3,179,900 for fiscal year
1979 for preparation of assessments, and for directing
and coordinating the preparatin of such river basin
plans as the Council determines are necessary and
desirable in carrying out the policy of this Act:
Provided, That $828,900 shall be available under this
subsection for preparation of the Columbia River
Estuary Special Study: Provided further, That $308,000
shall be available under this subsection for
preparation of the New England Port and Harbor Study
and $135,000 shall be available for completion of the
Hudson River Basin Level B Study: Provided further,
That $150,000 shall be available under this subsection
for completion of Case Studies of the Application of
Cost Sharing Policy Options for Flood Plain Management
in the Connecticut River Basin: Provided further, That
not more than $2,500,000 shall be available under this
subsection for the preparation of assessments: Provided
further, That the Council may transfer funds authorized
by this subsection to river basin commissions and to
Federal and State agencies upon such terms and
conditions as it determines are necessary and desirable
to carry out the above functions in an economical,
efficient, and timely manner, and that such commissions
and agencies are hereby authorized to receive and
expend such funds pursuant to this subsection.
(4) The sum of $9,000,000 for fiscal year 2005 to
be used to carry out the special water resources study
under section 102(b), to remain available until
expended.
* * * * * * *