[Senate Report 110-475]
[From the U.S. Government Publishing Office]



                                                      Calendar No. 1036
110th Congress                                                   Report
                                 SENATE
 2d Session                                                     110-475

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



 
AMENDING THE SAFE DRINKING WATER ACT TO PROVIDE GRANTS TO SMALL PUBLIC 
                         DRINKING WATER SYSTEMS

                                _______
                                

  September 22 (legislative day, September 17), 2008.--Ordered to be 
                                printed

                                _______
                                

    Mrs. Boxer, from the Committee on Environment and Public Works, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 1933]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Environment and Public Works, to which was 
referred the bill (S. 1933) to amend the Safe Drinking Water 
Act to provide grants to small public drinking water systems, 
having considered the same reports favorably thereon and 
recommends that the bill do pass.

                    General Statement and Background


                    SUMMARY AND NEED FOR LEGISLATION

    This Committee, the U.S. Environmental Protection Agency 
(EPA), state officials, health experts, and water utilities 
recognize that there are special challenges for many small 
drinking water systems seeking to provide the highest quality 
drinking water. EPA defines a small system as one serving fewer 
than 3,300 people. According to EPA's assessment of drinking 
water needs in 2003 (published in 2005), 45,000 of the nation's 
54,000 community water systems are small systems serving fewer 
than 3,300 people, with needs exceeding $34 billion over the 
next 20 years.\1\ EPA's review concluded:
---------------------------------------------------------------------------
    \1\Environmental Protection Agency, ``Drinking Water Infrastructure 
Needs Survey and Assessment; Third Report to Congress,'' page 7 (2005). 
In addition, systems serving between 3,301 and 10,000 people also have 
substantial needs not separately estimated in EPA's report.
---------------------------------------------------------------------------
    Small water systems face many unique challenges in 
providing safe drinking water to consumers. The substantial 
capital investments required to rehabilitate, upgrade, or 
install infrastructure, without the economies of scale 
available to larger systems, represent one challenge. Although 
the total small system need is modest compared to the need of 
larger systems, the costs borne on a per-household basis by 
small systems are significantly higher than those of larger 
systems.\2\
---------------------------------------------------------------------------
    \2\Ibid at 11.
---------------------------------------------------------------------------
    As noted by the National Academy of Sciences' National 
Research Council (NRC) in its 1997 review of small system 
drinking water challenges, ``meeting drinking water standards 
is most difficult for water systems in small communities. Small 
communities often cannot afford the equipment and qualified 
operators necessary to ensure compliance with safe drinking 
water standards.''
    Many of the Academies' findings and recommendations 
continue to be relevant today. The Academy panel noted that 
increases in both the number of drinking water regulations and 
the number of small community water systems over the past three 
decades have made the problem of providing safe drinking water 
to small communities even more challenging. The panel suggested 
that ``the solution to the problem of providing safe drinking 
water to small communities has three elements, each equally 
important: (1) providing affordable water treatment 
technologies, (2) creating the institutional structure 
necessary to ensure the financial stability of water systems, 
and (3) improving programs to train small system operators in 
all aspects of water system maintenance and management.'' Thus, 
the panel highlighted the importance of adequate funding for 
efforts to assist small system operators with affordable water 
treatment technologies and to offer technical assistance.

               Objectives and Overview of the Legislation

    The goal of the legislation is to amend the Safe Drinking 
Water Act to provide grants to small public drinking water 
systems. It includes a program for Indian tribes, and numerous 
measures to assist small water systems in complying with 
national primary drinking water regulations.

                      Section-by-Section Analysis


Section 1. Short title

    This section provides that the Act may be cited as the 
``Small Community Drinking Water Funding Act.''

Sec. 2. Findings and purpose

    This section finds that drinking water standards can place 
financial burdens on public water systems, especially systems 
that serve fewer than a few thousand people, and that some 
small public water systems have experienced water contamination 
problems that may pose a significant risk to the health of 
water consumers. It makes numerous other findings respecting 
the special needs of small water systems, including the need 
for scientific, technical, and professional resources, and for 
support for capital investments. This section establishes that 
the purpose of this Act is to establish a program to provide 
grants to small public water systems to meet applicable 
national primary drinking water regulations under the Safe 
Drinking Water Act (42 U.S.C. 300f et seq.), maintain water 
costs at a reasonable level for the communities served by small 
public water systems, and obtain technical assistance to 
develop the capacity to sustain operations over the long term.

Sec. 3. Small public water system assistance program

    This section refines the definitions in the Act including 
the definition of Indian Tribe in section 1401(14) of the Safe 
Drinking Water Act to ensure that they are eligible for 
assistance under the new small public water system assistance 
program. This section establishes the small public water system 
assistance program, defining eligible activity, eligible 
entity, and eligible state. Small system is defined to include 
public water systems serving up to 10,000 people for the 
purposes of this Act.
    This section allocates funds for grants to small public 
water systems, and for State and Indian Tribe programs to 
assist them. It also authorizes $750 million per year to carry 
out this program.

                          Legislative History

    Senator Reid introduced S. 1933 on August 1, 2007 with 
Senators Ensign, Boxer, Baucus, Murray, Clinton, Sanders, and 
Conrad. Senator Klobuchar later joined as a cosponsor. The bill 
was referred to the Committee on Environment and Public Works, 
and was ordered reported favorably out of the Committee without 
amendment on July 31, 2008.

                             Rollcall Votes

    S. 1933 passed the Committee by voice vote on July 31, 
2008, with Senator Inhofe requesting that he be recorded as 
voting aye.

                      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 
(Pub. L. 104-4), the Committee finds that S. 1933 would impose 
no Federal intergovernmental unfunded mandates on State, local, 
or tribal governments.

               Congressional Budget Office Cost Estimate

                                                   August 19, 2008.
Hon. Barbara Boxer,
Chairman, Committee on Environment and Public Works,
U.S. Senate, Washington, DC.
    Dear Madam Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1933, the Small 
Community Drinking Water Funding Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susanne S. 
Mehlman.
            Sincerely,
                                                   Peter R. Orszag.
    Enclosure.

S. 1933--Small Community Drinking Water Funding Act

    Summary: S. 1933 would require the Environmental Protection 
Agency (EPA) to establish a Small Public Water System 
Assistance Program. This legislation would authorize the 
appropriation of $750 million for each of fiscal years 2009 
through 2014 for EPA to administer this new program and to 
provide grants to small public drinking water systems located 
in states or areas governed by Indian tribes. Assuming 
appropriation of the authorized amounts, CBO estimates that 
implementing S. 1933 would cost $3.1 billion over the 2009-2013 
period and $1.4 billion after 2013. Enacting S. 1933 would not 
affect direct spending or revenues.
    S. 1933 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1933 is shown in the following table. 
The costs of this legislation fall within budget function 300 
(natural resources and environment). For this estimate, CBO 
assumes that S. 1933 will be enacted near the start of fiscal 
year 2009 and that the amounts authorized by the bill will be 
appropriated each year. Estimated outlays are based on 
historical spending patterns for similar programs.

----------------------------------------------------------------------------------------------------------------
                                                            By fiscal year, in millions of dollars--
                                               -----------------------------------------------------------------
                                                   2009       2010       2011       2012       2013    2009-2013
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Authorization Level...........................        750        750        750        750        750      3,750
Estimated Outlays.............................        300        600        690        735        750      3,075
----------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: S. 1933 
contains no intergovernmental or private-sector mandates as 
defined in UMRA, and state, local, and tribal governments would 
benefit from the funds authorized by this bill. The bill would 
establish grant programs to support small public water systems. 
The grant programs would be voluntary, and the associated 
requirements for participation would not be mandates under 
UMRA.
    Estimate prepared by: Federal Costs: Susanne S. Mehlman; 
Impact on State, Local, and Tribal Governments: Burke Doherty; 
Impact on the Private Sector: Amy Petz.
    Estimate approved by: Peter H. Fontaine, Assistant Director 
for Budget Analysis.

                            ADDITIONAL VIEWS

    I have spent much of my political career advocating for 
rural communities who lack the financial capability to comply 
with oftentimes expensive drinking water regulations. S. 1933, 
the Small Community Drinking Water Funding Act, takes a step in 
the right direction by providing much needed financial 
assistance to small public water systems struggling to keep up 
with new regulations and escalating construction costs. 
However, Congress should go further by requiring the 
Environmental Protection Agency (EPA) to develop a lower, more 
reasonable affordability threshold that will lead to new 
variance technologies, ultimately driving down the 
disproportionate cost of compliance to rural communities while 
still adequately protecting human health. For that reason, I 
filed amendments, but still support the underlying bill.
    The purpose of my amendments is to ensure that small towns 
across the country have safe, reliable and affordable drinking 
water. I introduced the Small Systems Safe Drinking Water Act 
that helps communities achieve these ends through several 
means. First, my legislation provides technical assistance to 
communities that lack the scientific and technical backgrounds 
to achieve compliance and operate complicated treatment 
facilities.
    My legislation also requires the Environmental Protection 
Agency to revise their affordability criteria. According to 
EPA, families can afford water rates of 2.5 percent of their 
annual median household income, or $1,000 per household. For 
some families, paying $83 a month for water is not a hardship 
but for so many more, it is a near impossibility. Therefore, 
there must be some flexibility in the calculation that 
incorporates the ability of the truly disadvantaged to pay 
these costs. Forcing systems to raise rates beyond what their 
ratepayers can afford may cause far more damage than 
intentioned. EPA needs to closely examine how it determines 
affordability and must identify variance technologies to assist 
the many hardship communities across the country.
    Additionally, this bill directs EPA to take additional 
steps when making this affordability determination. For rules 
that are governed by the new affordability standard, EPA must 
identify a variance technology for rules found unaffordable. 
Without such a technology, the EPA cannot take an enforcement 
action against a system serving less than 10,000 people.
    Most importantly, this bill requires the Federal Government 
to pay for these unfunded mandates. In 1995, Congress passed 
the Unfunded Mandates Reform Act to ensure that the Federal 
Government pays the costs incurred by state and local 
governments in complying with the certain requirements under 
Federal statutes and regulations. The current problem is two-
fold; our communities operate under too many regulations and 
not enough money to pay for them. Funding legislation is 
important but until that money becomes available, it is 
unreasonable to penalize and fine local communities because 
they cannot afford to pay for regulations the federal 
government imposed on them.
    Drinking water and treatment works are obvious necessities 
for functioning and healthy communities that can be vulnerable 
to natural disasters and terrorist attacks. For this reason, I 
offered an amendment in relation to my Water Security Act of 
2007. My amendment creates a partnership with local communities 
to secure their drinking and wastewater treatment works 
facilities. The language authorizes grants for communities to 
conduct vulnerability assessments, implement security measures, 
develop emergency response plan, and for needed technical 
assistance. Many communities have finished vulnerability 
assessments on their drinking water facilities, but lack the 
resources and technical assistance to go the next step and 
implement security plans and upgrade security features. It is 
imperative that Congress not ignore vulnerabilities and needs 
at community drinking water and treatment works facilities.

                                                   James M. Inhofe.

                        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:

           *       *       *       *       *       *       *

                              ----------                              


  TITLE XIV OF THE PUBLIC HEALTH SERVICE ACT (THE SAFE DRINKING WATER 
                            ACT)1

        [As Amended Through P.L. 109-58, Enacted August 8, 2005]

               TITLE XIV--SAFETY OF PUBLIC WATER SYSTEMS

                              SHORT TITLE

  Sec. 1400. This title may be cited as the ``Safe Drinking 
Water Act''.

                          Part A--Definitions

                              DEFINITIONS

  Sec. 1401. For purposes of this title:
---------------------------------------------------------------------------
    \1\This title, the ``Safe Drinking Water Act'', consists of title 
XIV of the Public Health Service Act (42 U.S.C. 300f-300j-9) as added 
by Public Law 93-523 (Dec. 16, 1974) and the amendments made by 
subsequent enactments.
---------------------------------------------------------------------------
          (1) The term ``primary drinking water regulation'' 
        means a regulation which--
                  (A) applies to public water systems;
                  (B) specifies contaminants which, in the 
                judgment of the Administrator, may have any 
                adverse effect on the health of persons;
                  (C) specifies for each such contaminant 
                either--
                          (i) a maximum contaminant level, if, 
                        in the judgment of the Administrator, 
                        it is economically and technologically 
                        feasible to ascertain the level of such 
                        contaminant in water in public water 
                        systems, or
                          (ii) if, in the judgment of the 
                        Administrator, it is not economically 
                        or technologically feasible to so 
                        ascertain the level of such 
                        contaminant, each treatment technique 
                        known to the Administrator which leads 
                        to a reduction in the level of such 
                        contaminant sufficient to satisfy the 
                        requirements of section 1412; and
                  (D) contains criteria and procedures to 
                assure a supply of drinking water which 
                dependably complies with such maximum 
                contaminant levels; including accepted methods 
                for quality control and testing procedures to 
                insure compliance with such levels and to 
                insure proper operation and maintenance of the 
                system, and requirements as to (i) the minimum 
                quality of water which may be taken into the 
                system and (ii) siting for new facilities for 
                public water systems. At any time after 
                promulgation of a regulation referred to in 
                this paragraph, the Administrator may add 
                equally effective quality control and testing 
                procedures by guidance published in the Federal 
                Register. Such procedures shall be treated as 
                an alternative for public water systems to the 
                quality control and testing procedures listed 
                in the regulation.
          (2) * * *

           *       *       *       *       *       *       *

          (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. 1465. (a) School Drinking Water Programs.--* * *

           *       *       *       *       *       *       *


              Part G--Small Public Water System Assistance

SEC. 1471. DEFINITIONS.

  In this part:
          (1) Eligible activity.--
                  (A) In general.--The term ``eligible 
                activity'' means an activity concerning a small 
                public water system (including obtaining 
                technical assistance) that is carried out by an 
                eligible entity for a purpose consistent with 
                section 1473(c)(1) or 1474(c)(1), as 
                appropriate.
                  (B) Exclusion.--The term ``eligible 
                activity'' does not include any activity to 
                increase the population served by a small 
                public water system, except to the extent that 
                the State under section 1473(b)(1) or the 
                Administrator under section 1474(b)(1) 
                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 small public water system that--
                  (A) is located in a State or an area governed 
                by an Indian Tribe; and
                  (B)(i) if located in a State, serves a 
                community that, under affordability criteria 
                established by the State under section 
                1452(d)(3), is determined by the State to be--
                          (I) a disadvantaged community; or
                          (II) a community the State expects to 
                        become a disadvantaged community as a 
                        result of carrying out an eligible 
                        activity; 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)(3) and in consultation with the 
                Secretary, to be--
                          (I) a disadvantaged community; or
                          (II) a community the Administrator 
                        expects to become a disadvantaged 
                        community as a result of carrying out 
                        an eligible activity.
          (3) Eligible state.--The term ``eligible State'' 
        means a State that has--
                  (A) adopted, and is implementing, an approved 
                operator certification program under section 
                1419; and
                  (B) established affordability criteria under 
                section 1452(d)(3) for use in identifying 
                disadvantaged communities.
          (4) Program.--The term ``Program'' means the Small 
        Public Water System Assistance Program established 
        under section 1472(a).
          (5) Secretary.--The term ``Secretary'' means the 
        Secretary of Health and Human Services, acting through 
        the Director of the Indian Health Service.
          (6) 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 10,000 or 
        fewer.

SEC. 1472. SMALL PUBLIC WATER SYSTEM ASSISTANCE PROGRAM.

  (a) Establishment.--Not later than July 1, 2008, the 
Administrator shall establish within the Environmental 
Protection Agency a Small Public Water System Assistance 
Program.
  (b) Duties.--The head of the Program shall--
          (1) in accordance with section 1474, establish and 
        administer a small public water system assistance 
        program for, and provide grants to, eligible entities 
        located in areas governed by Indian Tribes, for use in 
        carrying out eligible activities;
          (2) identify, and prepare annual prioritized lists 
        of, activities for eligible entities located in areas 
        governed by Indian Tribes that are eligible for grants 
        under section 1474;
          (3) provide funds to States for use in establishing 
        small public water system assistance programs under 
        section 1473 that award grants to eligible entities to 
        carry out eligible activities; and
          (4) prepare, and submit to the Administrator, the 
        reports required under subsection (d).
  (c) Allocation of Funds.--
          (1) States.--
                  (A) In general.--Subject to subparagraphs (B) 
                through (D) and paragraph (2)(A), for each 
                fiscal year, the Administrator, through the 
                head of the Program, using the most recent 
                available needs survey conducted by the 
                Administrator under section 1452(h), shall 
                allocate the funds made available to carry out 
                the Program for the fiscal year among eligible 
                States based on the ratio that--
                          (i) the financial need associated 
                        with treatment projects for small 
                        public water systems in the State; 
                        bears to
                          (ii) the total financial need 
                        associated with treatment projects for 
                        all small public water systems in all 
                        States.
                  (B) Additional requirements.--Any additional 
                financial needs of small public water systems 
                associated with the cost of treatment projects 
                needed to comply with a national primary 
                drinking water regulation that is promulgated 
                after the most recent needs survey conducted 
                under section 1452(h) shall be factored into 
                the determination of financial need under 
                clauses (i) and (ii) of subparagraph (A) for 
                each fiscal year.
                  (C) Minimum allocation.--An allocation of 
                funds to a State for a fiscal year under 
                subparagraph (A), taking into consideration any 
                additional financial needs described in 
                subparagraph (B), shall be in an amount that is 
                at least 1 percent of the amount of funds 
                available for that fiscal year.
                  (D) Redistribution if nonuse.--If a State 
                does not qualify for, or fails to request, 
                funds allocated to the State under subparagraph 
                (A) in any fiscal year, the Administrator shall 
                redistribute the funds among the States that--
                          (i) request funds for that fiscal 
                        year; and
                          (ii) are eligible to receive the 
                        funds under subparagraph (A) for that 
                        fiscal year.
          (2) Indian tribes.--
                  (A) In general.--For each fiscal year, in 
                accordance with subparagraph (B), 3 percent of 
                the total amount of funds made available to 
                carry out the Program for the fiscal year shall 
                be allocated by the Administrator to provide 
                grants to eligible entities that are located in 
                areas governed by Indian Tribes through the 
                program established under section 1474(a).
                  (B) Use of funds.--
                          (i) In general.--For each fiscal 
                        year, the Administrator shall award, on 
                        a competitive basis, not less than 1.5 
                        percent of the funds allocated under 
                        subparagraph (A) to nonprofit technical 
                        assistance organizations, to be used 
                        for the purposes of--
                                  (I) assisting the 
                                Administrator in preparing the 
                                list required under section 
                                1474(b) (including assisting 
                                the Administrator in 
                                identifying the highest 
                                priority eligible activities 
                                for eligible entities located 
                                in areas governed by Indian 
                                Tribes for which a grant under 
                                section 1474 may be used);
                                  (II) assisting eligible 
                                entities located in areas 
                                governed by Indian Tribes in--
                                          (aa) assessing needs 
                                        relating to eligible 
                                        activities; and
                                          (bb) identifying 
                                        available sources of 
                                        funding to meet the 
                                        cost-sharing 
                                        requirement of section 
                                        1474(f)(1); and
                                  (III) assisting eligible 
                                entities located in areas 
                                governed by Indian Tribes that 
                                receive funding under section 
                                1474 in--
                                          (aa) planning, 
                                        implementing, and 
                                        maintaining eligible 
                                        activities that are 
                                        funded under that 
                                        section; and
                                          (bb) preparing 
                                        reports required under 
                                        section 1474(h).
                          (ii) Consultation.--Each nonprofit 
                        technical assistance organization that 
                        receives funds under clause (i) shall 
                        consult with the Administrator, through 
                        the head of the program, before 
                        carrying out any activity for the 
                        purposes described in subclauses 
                        (II)(aa) and (III)(aa) of that clause.
                          (iii) No funds for lobbying 
                        expenses.--None of the funds made 
                        available to a nonprofit technical 
                        assistance organization under clause 
                        (i) shall be used to pay lobbying 
                        expenses.
          (3) Program.--For each fiscal year, the Administrator 
        may use not more than 0.1 percent of the funds made 
        available to carry out the Program to pay reasonable 
        costs incurred in the administration of the Program.
  (d) Reports.--Not later than January 1, 2009, and annually 
thereafter through January 1, 2014, the Administrator shall--
          (1) submit, to the Committee on Energy and Commerce 
        of the House of Representatives and the Committee on 
        Environment and Public Works of the Senate, a report 
        that, for the preceding fiscal year--
                  (A) lists the eligible activities for 
                eligible entities, as prepared under sections 
                1473(b)(1) and 1474(b)(1), located in areas 
                governed by Indian Tribes and in each State 
                receiving funds under this part;
                  (B) identifies the number of grants awarded 
                by each State, and by the Administrator to 
                eligible entities located in areas governed by 
                Indian Tribes, under this part;
                  (C) identifies each eligible entity that 
                received 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. 1473. STATE SMALL PUBLIC WATER SYSTEM ASSISTANCE PROGRAMS.

  (a) In General.--To be eligible to receive funding under this 
part, a State shall--
          (1) be an eligible State;
          (2) not later than July 1, 2008 (if funding is sought 
        for fiscal year 2008) or not later than September 30 of 
        any of fiscal years 2008 through 2014 (if funding is 
        sought for the following fiscal year), establish a 
        small public water system assistance program--
                  (A) under which the requirements of 
                subsection (b), oversight, and related 
                activities (other than financial 
                administration) with respect to the program are 
                administered--
                          (i) in the case of a State that is 
                        exercising primary enforcement 
                        responsibility for public water 
                        systems, by the State agency having 
                        primary responsibility for 
                        administration of the State program 
                        under section 1413; and
                          (ii) in the case of a State that is 
                        not exercising primary enforcement 
                        authority for public water systems, by 
                        a State agency selected by the Governor 
                        of the State; and
                  (B) that meets the requirements of this 
                section; and
          (3) for each fiscal year for which funding is sought 
        under this section--
                  (A) in preparing an intended use plan under 
                section 1452(b), after providing for public 
                review and comment, prepare an annual list of 
                eligible activities for eligible entities in 
                the State in accordance with subsection (b); 
                and
                  (B) prepare and submit to the Administrator a 
                request for the funding, by such date and in 
                such form as the Administrator shall prescribe.
  (b) Program Priority Requirement.--
          (1) List of eligible activities.--A small public 
        water system assistance program established under 
        subsection (a) shall, for each fiscal year for which 
        funding is sought, identify, and, using the priority 
        criteria described in paragraph (2) and considering the 
        additional criteria described in paragraph (3), list in 
        descending order of priority, eligible activities for 
        eligible entities in the State for which funds provided 
        from a grant under this part may be used.
          (2) Priority criteria.--In preparing the list under 
        paragraph (1), a small public water system assistance 
        program shall give priority for the use of grants to 
        eligible activities that--
                  (A) address the most serious risk to human 
                health;
                  (B) are necessary to ensure compliance with 
                national primary water regulations applicable 
                to eligible entities under section 1412; and
                  (C) assist systems most in need, as 
                calculated on the basis of median household 
                income, under affordability criteria 
                established by the State under section 
                1452(d)(3).
          (3) Additional criteria.--In addition to the priority 
        criteria described in paragraph (2), a small public 
        water system assistance program shall, in preparing a 
        list under paragraph (1), consider giving additional 
        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 connections).
  (c) Use of Funds.--Using any funds received by a State under 
this section for a fiscal year, in accordance with the list 
prepared under subsection (b), a small public water system 
assistance program established by the State under subsection 
(a)--
          (1) shall provide to an eligible entity, on a cost-
        shared basis, a grant to be used for an eligible 
        activity (including source water protection) the 
        purpose of which is compliance with national primary 
        drinking water regulations applicable to the eligible 
        entity under section 1412;
          (2) shall--
                  (A) award, on a competitive basis, not less 
                than 1.5 percent of the funds to nonprofit 
                technical assistance organizations to be used 
                for the purposes of--
                          (i) assisting the State in preparing 
                        the list required under subsection (b) 
                        (including assisting the State in 
                        identifying the highest priority 
                        eligible activities for eligible 
                        entities located in the State for which 
                        a grant under this section may be 
                        used); and
                          (ii) assisting eligible entities in--
                                  (I) assessing needs relating 
                                to eligible activities;
                                  (II) identifying available 
                                sources of funding to meet the 
                                cost-sharing requirement of 
                                subsection (f); and
                                  (III) planning, implementing, 
                                and maintaining any eligible 
                                activities of the eligible 
                                entities that receive funding 
                                under this section;
                  (B) require each nonprofit technical 
                assistance organization that receives funds 
                under subparagraph (A) to consult with the 
                State, through the head of the small public 
                water assistance program, before carrying out 
                any activity for the purposes described in 
                subclauses (I) and (III) of subparagraph 
                (A)(ii); and
                  (C) require that none of the funds made 
                available to a nonprofit technical assistance 
                organization under subparagraph (A) be used to 
                pay lobbying expenses; and
          (3) may use not to exceed 1 percent of the funds 
        allocated to the State to pay reasonable costs incurred 
        in the administration of the small public water system 
        assistance program.
  (d) Limitation on Use of Funds.--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 
that are funded under this section.
  (e) 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 State--
                  (A) does not have the technical, managerial, 
                and financial capability 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 State 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 State 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 
                        achieving those regulations; and
                  (C) in a case in which paragraph (1)(A) 
                applies to an eligible entity, 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), if the State determines that the 
                measures are necessary to ensure that the 
                eligible entity has the technical, managerial, 
                and financial capability 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 State shall conduct a review to 
        determine whether paragraph (1)(A) applies to the 
        entity.
  (f) 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 may not be 
                funded by a grant under this section, an 
                eligible entity may use Federal financial 
                assistance other than assistance received under 
                this section.
          (2) Waiver of cost-sharing requirement.--
                  (A) In general.--Subject to subparagraph (B), 
                a State may waive the requirement of an 
                eligible entity to pay all or a portion of the 
                share of an eligible activity that may not be 
                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 in 
                which a State receives funding under this 
                section, the total amount of cost-share waivers 
                provided by the State under subparagraph (A) 
                shall not exceed 30 percent of the amount of 
                funding received by the State for the fiscal 
                year under section 1472(c)(1).
  (g) Unobligated Funds.--Any funds not obligated by the State 
for a purpose consistent with subsection (c) within 1 year 
after the date of the allocation of the funds by the 
Administrator under section 1472(c) shall be returned to the 
Administrator for reallocation under that section.
  (h) Reports.--Not later than November 1 following each fiscal 
year in which a State receives funding under this section, the 
State shall--
          (1) submit to the Administrator a report that, for 
        the preceding fiscal year--
                  (A) lists the eligible activities for 
                eligible entities, as prepared under subsection 
                (b);
                  (B) identifies the number of grants awarded 
                by the State small public water system 
                assistance program to eligible entities;
                  (C) identifies each eligible entity that 
                received 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 grants (including the status of the 
                eligible activity); and
          (2) make the report under paragraph (1) available to 
        the public.

SEC. 1474. SMALL PUBLIC WATER SYSTEM ASSISTANCE PROGRAM FOR INDIAN 
                    TRIBES.

  (a) Establishment.--Not later than July 1, 2008, the 
Administrator shall establish a small public water system 
assistance program for Indian Tribes, through which eligible 
entities located in areas governed by the Indian Tribe may 
receive grants for eligible activities under this part.
  (b) Program Priority Requirement.--
          (1) List of eligible activities.--
                  (A) In general.--The Administrator, acting 
                through the head of the small public water 
                system assistance program for Indian Tribes, in 
                consultation with the Secretary, shall, for 
                each fiscal year, identify, and, using the 
                priority criteria described in paragraph (2) 
                and considering the additional criteria 
                described in paragraph (3), 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.
                  (B) Coordination.--
                          (i) In general.--To the maximum 
                        extent practicable, the Administrator 
                        shall ensure that the list under 
                        subparagraph (A) 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 that is promulgated after 
                        the 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.
          (2) Priority criteria.--In preparing the list under 
        paragraph (1), the Administrator shall give priority 
        for the use of grants to eligible activities that--
                  (A) address the most serious risk to human 
                health;
                  (B) are necessary to ensure compliance with 
                national primary water regulations applicable 
                to eligible entities under section 1412; and
                  (C) assist systems most in need, as 
                calculated on the basis of median household 
                income, under affordability criteria published 
                by the Administrator under section 1452(d)(3).
          (3) Additional criteria.--In addition to the priority 
        criteria described in paragraph (2), the Administrator 
        shall, in preparing a list under paragraph (1), 
        consider giving additional 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 connections).
  (c) Use of Funds.--
          (1) In general.--Using funds allocated under section 
        1472(c)(2)(A), the small public water system assistance 
        program established under subsection (a) shall provide 
        to an eligible entity located in an area governed by an 
        Indian Tribe, on a cost-shared basis, a grant to be 
        used for an eligible activity (including source water 
        protection) the purpose of which is compliance with 
        national primary drinking water regulations applicable 
        to the eligible entity under section 1412.
          (2) Allocation of grant funding.--For each fiscal 
        year, taking into consideration the funding allocation 
        under section 1472(c)(2)(A) for the fiscal year, the 
        head of the small public water assistance program 
        established under subsection (a), in consultation with 
        the Secretary, shall provide grants under paragraph (1) 
        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 subsection (b).
  (d) Limitation on Use of Funds.--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 
that are funded under this section.
  (e) 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, 
                and financial capability 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 
                        achieving those regulations; and
                  (C) in a case in which paragraph (1)(A) 
                applies to an eligible entity, 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), if the Administrator determines 
                that the measures are necessary to ensure that 
                the eligible entity has the technical, 
                managerial, and financial capability 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.
  (f) 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 may not be 
                funded by a grant under this section, an 
                eligible entity 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 eligible 
                activity that may not be funded by a grant 
                under this section based on a determination by 
                the Administrator 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 under subparagraph (A) shall 
                not exceed 30 percent of the amount of funding 
                allocated to eligible entities located in areas 
                governed by Indian Tribes for the fiscal year 
                under section 1472(c)(2)(A).
  (g) Unobligated Funds.--Any funds not obligated by the small 
public water system assistance program established under 
subsection (a) for a purpose consistent with section 
1472(c)(2)(B) and subsection (c) within 1 year after the date 
of allocation of the funds by the Administrator under section 
1472(c)(2)(A) shall be returned to the Administrator for 
reallocation under that section.
  (h) Reports.--Not later than November 1 following each fiscal 
year in which an Indian Tribe receives funding under this 
section, the Indian Tribe shall submit to the Administrator a 
report that, for the preceding fiscal year--
          (1) identifies the number of grants awarded to 
        eligible entities located in areas governed by the 
        Indian Tribe;
          (2) identifies each such eligible entity that 
        received a grant to carry out an eligible activity;
          (3) identifies the amount of each grant provided to 
        such an eligible entity to carry out an eligible 
        activity; and
          (4) describes each eligible activity funded by such 
        grants (including the status of the eligible activity).

SEC. 1475. AUTHORIZATION OF APPROPRIATIONS.

  There is authorized to be appropriated to carry out this part 
$750,000,000 for each of fiscal years 2008 through 2014.

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