[Federal Register Volume 70, Number 121 (Friday, June 24, 2005)]
[Notices]
[Pages 36583-36586]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-12660]


-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

[FRL-7928-9]


State Allotment Percentages for the Drinking Water State 
Revolving Fund Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The 1996 Safe Drinking Water Act (SDWA) Amendments established 
a Drinking Water State Revolving Fund (DWSRF) program and authorized 
$9.6 billion to be appropriated for the program through fiscal year 
2003. Congress directed that allotments for fiscal year 1998 and 
subsequent years would be distributed among States based on the results 
of the most recent Drinking Water Infrastructure Needs Survey and 
Assessment. In this notice, the Environmental Protection Agency (EPA) 
is announcing revised DWSRF program State allotment percentages in 
accordance with the results from the most recent 2003 Drinking Water 
Infrastructure Needs Survey and Assessment (Needs Assessment), which 
was released on June 14, 2005. The revised State allotment percentages 
affect DWSRF program appropriations for fiscal years 2006 through 2009. 
Beginning in fiscal year 1998, EPA established a formula that allocates 
funds to the States based directly on each State's proportional share 
of the total need for States, provided that each State receives a 
minimum share of one percent of the funds available to the States, as 
required by the SDWA. EPA has made the determination that it will 
continue to use this method for allocating DWSRF program funds. The 
findings from the 2003 Needs Assessment will change the percentage of 
the DWSRF program funding received by some States in prior years. This 
change reflects an increase or decrease in these States' share of the 
total needs for States and will allow appropriations disbursements to 
more accurately reflect the needs of the States to reach the public 
health objectives of the SDWA. The Agency believes that the 2003 Needs 
Survey and Assessment more accurately captures needs for necessary 
long-term rehabilitation and replacement of deteriorating 
infrastructure that were under-reported in the earlier surveys.

DATES: This notice is effective June 24, 2005.

FOR FURTHER INFORMATION CONTACT: For technical inquiries, contact Jeff 
McPherson, Drinking Water Protection Division, Office of Ground Water 
and Drinking Water (4606M), Environmental Protection Agency, 1200 
Pennsylvania Ave., NW., Washington, DC 20460; telephone number: (202) 
564-6878; fax number: (202) 564-3757; e-mail address: 
[email protected]. Copies of this document and information on 
the Drinking Water Infrastructure Needs Survey and Assessment and the 
DWSRF program can be found on EPA's Office of Ground Water and Drinking 
Water Web site at http://www.epa.gov/safewater/.

SUPPLEMENTARY INFORMATION: The 1996 Safe Drinking Water Act (SDWA) 
Amendments established a Drinking Water State Revolving Fund (DWSRF) 
program and authorized $9.6 billion to be appropriated for the program 
through fiscal year 2003. Through federal fiscal year 2005, Congress 
has appropriated $7.8 billion for the DWSRF program. Congress directed 
that allotments for fiscal year 1998 and subsequent years be 
distributed among States based on the results of the most recent 
Drinking Water Infrastructure Needs Survey and Assessment (SDWA section 
1452(a)(1)(D)(ii)), which must be conducted every four years. The first 
survey, which reflected 1995 data, was released in February 1997 and 
the second survey, which reflected 1999 data, was released in February 
2001. The 2003 Drinking Water Infrastructure Needs Survey and 
Assessment, which was conducted over the last two years, was released 
on June 14, 2005 (EPA 816-R-05-001). The survey and assessment was 
completed in cooperation with the States. The States participated in 
both the design and development of the survey. The survey examined the 
needs of water systems and used these data to extrapolate needs to each 
State. The survey included all of the nation's 1,342 largest systems 
(those serving over 40,000 people) and a statistical sample of 2,553 
systems serving 3,301--40,000 people. For the 1999 Needs Assessment, 
EPA conducted site visits to approximately 600 small community water 
systems and 100 not-for-profit noncommunity water systems. The EPA 
believes that the needs captured from the site visits in 1999 
represented a fair and complete assessment of these systems' 20-year 
needs. Findings from 1999 were very similar to the findings in 1995,

[[Page 36584]]

indicating that the systems needs did not change significantly over a 
four-year period. Therefore, EPA decided it could estimate the 2003 
needs for small community water systems and not-for-profit noncommunity 
water systems by adjusting the 1999 needs to 2003 dollars.
    The sample design for the survey produces a statistically valid 
State-by-State estimate of need. The 2003 Needs Assessment presents 
State-by-State needs in several ways. For each State, the Needs 
Assessment provides a bottom-line estimate of the total need, which 
reflects the capital costs for all drinking water infrastructure 
projects allowed for inclusion in the Survey. The Needs Assessment also 
presents capital needs for each State by system size, by category of 
need (i.e., treatment, distribution and transmission, storage, source, 
and ``other''), by existing SDWA regulation, and by current and future 
need. Current needs are projects that a system considers a high 
priority for near-term implementation to enable a water system to 
continue to deliver safe drinking water. The Needs Assessment also 
allocated the $0.9 billion need for the recently promulgated Arsenic 
Rule. The EPA used the total national cost for the Arsenic Rule from 
the Economic Analysis to allocate the Rule's implementation cost to 
each State based on the occurrence data for the number of systems with 
arsenic over 10 ppb.
    The 2003 Needs Assessment found that the total national need is 
$276.8 billion (Table 1). This estimate represents the needs of the 
approximately 53,000 community water systems and 21,400 not-for-profit 
noncommunity water systems that are eligible to receive DWSRF program 
assistance. These systems are found in all 50 States, the District of 
Columbia, Puerto Rico, on American Indian lands and in Alaska Native 
Villages, and the Virgin Island and Pacific Island territories.

Table 1.--2003 Drinking Water Infrastructure Needs Survey and Assessment
                              20-Year Needs
------------------------------------------------------------------------
                                                                 Need
                        Type of need                          (billions)
------------------------------------------------------------------------
States.....................................................       $263.8
Territories................................................          0.6
American Indian and Alaska Native Villages.................          2.4
Costs for Proposed and Recent Regulations (does not include          9.9
 the recently promulgated Arsenic Rule)....................
                                                            ------------
    Total National Need....................................      $276.8
------------------------------------------------------------------------
Note: Numbers may not total due to rounding.

    The total national need also includes $9.9 billion in capital needs 
associated with recently promulgated (excluding the Arsenic Rule) and 
future regulations, as identified in EPA Economic Analyses accompanying 
the rules. Although these needs are included in the total national 
need, they were not apportioned to the States based upon the unanimous 
recommendation of the State representatives who participated in the 
survey design. The States expressed concern that the methods available 
for allocating the costs of these regulations would not represent the 
true costs of compliance on a State level. The total State need, which 
is the figure that EPA will use to calculate the State allotments, 
includes only the needs of the 50 States, the District of Columbia, and 
Puerto Rico. The 2003 Needs Assessment estimates that the total State 
need is $263.8 billion.

Allocation Method

    On October 31, 1996, EPA solicited public comment on six options 
for using the results of the first Drinking Water Infrastructure Needs 
Survey and Assessment to allocate DWSRF program funds to the States (61 
FR 56231). On March 18, 1997, EPA announced its decision to allocate 
DWSRF program funds for fiscal years 1998 through 2001 appropriations 
based on each State's proportional share of the total eligible needs 
for the States as derived from the 1995 Needs Assessment (62 FR 12900). 
EPA used this same method when allocating DWSRF program funds for 
fiscal years 2002 through 2005, utilizing the results of the 1999 Needs 
Assessment. EPA has made the determination that it will continue to use 
this method for allocating DWSRF program funds for fiscal years 2006 
through 2009 appropriations, utilizing the results of the 2003 Needs 
Assessment. The funds available to the States will be the level of 
funds appropriated by Congress, less the national set-asides, which 
includes an allocation for American Indian and Alaska Native Village 
water systems. Of the funds available to States, the SDWA includes 
specific allocations for the Pacific Islands, the Virgin Islands, and 
the District of Columbia. Each State will receive an allotment of DWSRF 
program funds based on each State's proportional share of the total 
State need ($263.8 billion), provided that each State receives a 
minimum allocation of one percent of the funds available to States, as 
required by the SDWA.
    The 2003 Needs Assessment found that 22 States, Puerto Rico, and 
the District of Columbia each had less than one percent of the total 
national need (in aggregate, 8 percent of the total national need); 
however, for 2006 to 2009, each of these States will be eligible for 
one percent of the annual DWSRF funds made available to states (or, in 
aggregate, 24 percent of the total DWSRF funds made available to 
states). The discrepancy between these States' allocations percentages 
and their proportional needs as identified in the 2003 Assessment may 
be due, in part, to a number of these States participating in the needs 
assessment effort to a lesser degree than the other States.
    The total State need includes all documented projects collected by 
the Needs Assessment. In general, a project was included in the Needs 
Assessment if project documentation demonstrated that meeting the need 
would address the public health objectives of the SDWA. The total State 
need includes both projects that are currently needed and future 
projects that will be needed over the next 20 years in four general 
categories: treatment, source, storage, and transmission and 
distribution. The formula based on the total need makes no distinction 
between the four categories--that is, it assigns an equal weight to all 
categories of need. Also, projects to correct immediate public health 
threats (e.g., replacing a deteriorated filter plant) are given the 
same weight as less critical needs (e.g., replacing a storage tank that 
is expected to reach the end of its useful life in five years). With 
the exception of the Arsenic Rule, capital costs associated with 
recently promulgated and future regulations were included in the total

[[Page 36585]]

national need but not distributed to individual states. Costs 
associated with the Arsenic Rule were allocated to each State based on 
occurrence data. The Needs Assessment excluded capital projects that 
are ineligible for DWSRF program assistance, such as dams, reservoirs 
and projects needed solely for growth.

Allocation of Funds

    Table 2 contains each State's expected DWSRF program allotment 
based on an appropriation of $850,000,000 and national set-aside 
assumptions. The appropriation amount is based on the President's 
budget request of $850,000,000 for fiscal year 2006. The national set-
asides for fiscal year 2006 include funds for American Indian and 
Alaska Native Village water systems at the level of 1.5 percent of the 
total appropriation. (SDWA Section 1452(i)). The amount will be 
$12,750,000 for Indian Tribes and Alaska Native Villages if funds are 
appropriated at the level of the President's 2006 budget request. 
Additional national set-asides for fiscal year 2006 include $2,000,000 
for monitoring for unregulated contaminants. If funds are appropriated 
for the DWSRF program at the level of $850,000,000 and if the 
anticipated national set-asides do not change, the total funds 
available to the States, the District of Columbia, and Territories 
would equal $835,250,000. Because the percentages are based on the 
total funds available for allotment to the States, they can be used for 
general planning purposes for future years. Once the appropriated 
amount and national set-asides are known, a State's allotment can be 
estimated by subtracting the national set-asides from the total funds 
available for allotment and then applying the appropriate percentage 
shown below. EPA will annually notify each State of their allotment 
from a specific fiscal year's appropriation after the final budget has 
been passed.
    The findings from the 2003 Needs Assessment will change the 
individual allotment percentage of the DWSRF program funds received by 
some States when compared to their current allotment percentage. This 
change reflects an increase or decrease in these States' proportion of 
the total State need. The variation in needs occurred principally as a 
result of the data submitted by individual water systems, but also in 
part due to refinements in the survey methods. With the collection of 
data from nearly 4,000 water systems and over 128,600 projects 
submitted, a change in some States' allotments represents an inevitable 
consequence of conducting a survey of this scale.

Table 2.--Distribution of Drinking Water State Revolving Fund Allotments
------------------------------------------------------------------------
                                                              Amount
                   State                       Percent       allotted
------------------------------------------------------------------------
Alabama....................................         1.00      $8,352,500
Alaska.....................................         1.00       8,352,500
Arizona....................................         2.84      23,704,100
Arkansas...................................         1.26      10,487,900
California.................................         8.15      68,108,400
Colorado...................................         1.76      14,714,300
Connecticut................................         1.00       8,352,500
Delaware...................................         1.00       8,352,500
Florida....................................         4.52      37,724,800
Georgia....................................         2.81      23,461,900
Hawaii.....................................         1.00       8,352,500
Idaho......................................         1.00       8,352,500
Illinois...................................         4.08      34,068,800
Indiana....................................         1.40      11,655,600
Iowa.......................................         1.25      10,405,500
Kansas.....................................         1.00       8,352,500
Kentucky...................................         1.05       8,759,400
Louisiana..................................         1.42      11,833,100
Maine......................................         1.00       8,352,500
Maryland...................................         1.38      11,493,200
Massachusetts..............................         2.68      22,365,800
Michigan...................................         3.46      28,893,000
Minnesota..................................         1.80      15,038,600
Mississippi................................         1.00       8,352,500
Missouri...................................         1.94      16,217,400
Montana....................................         1.00       8,352,500
Nebraska...................................         1.00       8,352,500
Nevada.....................................         1.00       8,352,500
New Hampshire..............................         1.00       8,352,500
New Jersey.................................         2.21      18,484,300
New Mexico.................................         1.00       8,352,500
New York...................................         4.45      37,184,400
North Carolina.............................         3.37      28,109,400
North Dakota...............................         1.00       8,352,500
Ohio.......................................         3.00      25,040,200
Oklahoma...................................         1.61      13,484,400
Oregon.....................................         1.46      12,213,900
Pennsylvania...............................         3.37       28,133,00
Puerto Rico................................         1.00       8,352,500
Rhode Island...............................         1.00       8,352,500
South Carolina.............................         1.00       8,352,500
South Dakota...............................         1.00       8,352,500
Tennessee..................................         1.04       8,668,600
Texas......................................         8.24      68,814,200
Utah.......................................         1.00       8,352,500

[[Page 36586]]

 
Vermont....................................         1.00       8,352,500
Virginia...................................         1.06       8,892,600
Washington.................................         2.14      17,906,900
West Virginia..............................         1.00       8,352,500
Wisconsin..................................         1.94      16,169,700
Wyoming....................................         1.00       8,352,500
District of Columbia.......................         1.00       8,352,500
Other Areas *..............................         0.33       2,756,300
                                            --------------
    Total..................................       100.00     835,250,000
------------------------------------------------------------------------


    Dated: June 17, 2005.
Benjamin H. Grumbles,
Assistant Administrator, Office of Water.
[FR Doc. 05-12660 Filed 6-23-05; 8:45 am]
BILLING CODE 6560-50-P