    Federal Water Requirements: Challenges to Estimating the Cost
    Impact on Local Communities (30-NOV-05, GAO-06-151R).

    Under the Safe Drinking Water Act and the Federal Water Pollution
    Control Act, commonly referred to as the Clean Water Act, the
    Environmental Protection Agency (EPA) has responsibility for
    protecting public health and welfare, as well as the integrity of
    our nation's waters. Federal water requirements under these acts
    affect facilities providing the most basic services at the local
    level, including drinking water treatment plants and distribution
    systems; wastewater treatment plants and collection systems; and
    storm sewer systems, which collect storm water, or the runoff
    created by rainfall and other types of wet weather. For example,
    depending on the circumstances, local communities may have to pay
    for installing new treatment technologies or taking other
    measures so that community-based or regional facilities can meet
    applicable water quality standards. Nationwide, there are roughly
    53,000 community drinking water systems, 17,000 municipal
    wastewater treatment plants, and 7,000 communities served by
    municipal storm sewer collection systems that may be affected by
    federal water requirements. While recognizing the public health
    and environmental benefits of federal water requirements,
    communities are increasingly voicing concerns about the financial
    burden imposed by these requirements--in particular, the
    projected costs of more recent regulations and their cumulative
    costs over time. Over the years, EPA, water and community
    associations, and other parties have developed various estimates
    of some of the different costs related to ensuring clean water
    and safe drinking water. Additionally, the Unfunded Mandates
    Reform Act of 1995 requires EPA to prepare a written statement
    identifying the costs and benefits of federal mandates contained
    in certain regulations. However, the act does not require EPA to
    identify the cumulative costs and benefits of multiple
    regulations. As the Congress considers legislation to provide
    more resources to communities to address regulatory costs and
    aging water infrastructure, it is seeking a more complete
    understanding of the federal water requirements affecting local
    communities and the cumulative costs associated with implementing
    them. In this context, Congress asked us to determine the
    cumulative cost of federal water requirements. In conducting this
    work, we identified some major methodological challenges to
    developing complete and reliable cost information. This report
    summarizes the information provided Congress during our November
    17, 2005, briefing and formally transmits the charts presented
    during that briefing. As requested, this report provides
    information on (1) key federal water requirements that local
    communities are subject to under the Safe Drinking Water Act and
    the Clean Water Act, (2) the extent to which existing studies
    provide information on the cumulative cost of such requirements
    to communities, and (3) the methodological challenges to
    developing reliable cumulative cost estimates attributable to
    federal water requirements.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-06-151R
        ACCNO:   A42357
      TITLE:     Federal Water Requirements: Challenges to Estimating the
    Cost Impact on Local Communities
         DATE:   11/30/2005
      SUBJECT:   Cost analysis
    	     Environmental law
    	     Environmental monitoring
    	     Federal regulations
    	     Health hazards
    	     Local governments
    	     Potable water
    	     Water pollution control
    	     Water quality
    	     Water treatment
    	     Cost estimates
    	     Standards (water quality)

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    ******************************************************************
    GAO-06-151R

    United States Government Accountability Office Washington, DC 20548

    November 30, 2005

    The Honorable James M. Inhofe Chairman, Committee on Environment and
    Public Works United States Senate

    The Honorable Mike Crapo United States Senate

    Subject: 	Federal Water Requirements: Challenges to Estimating the Cost
    Impact on Local Communities

    Under the Safe Drinking Water Act and the Federal Water Pollution Control
    Act, commonly referred to as the Clean Water Act, the Environmental
    Protection Agency (EPA) has responsibility for protecting public health
    and welfare, as well as the integrity of our nation's waters. Federal
    water requirements under these acts affect facilities providing the most
    basic services at the local level, including drinking water treatment
    plants and distribution systems; wastewater treatment plants and
    collection systems; and storm sewer systems, which collect storm water, or
    the runoff created by rainfall and other types of wet weather. For
    example, depending on the circumstances, local communities may have to pay
    for installing new treatment technologies or taking other measures so that
    community-based or regional facilities can meet applicable water quality
    standards. Nationwide, there are roughly 53,000 community drinking water
    systems,1 17,000 municipal wastewater treatment plants, and 7,000
    communities served by municipal storm sewer collection systems2 that may
    be affected by federal water requirements.

    While recognizing the public health and environmental benefits of federal
    water requirements, communities are increasingly voicing concerns about
    the financial burden imposed by these requirements-in particular, the
    projected costs of more recent regulations and their cumulative costs over
    time. Over the years, EPA, water and community associations, and other
    parties have developed various estimates of some of the different costs
    related to ensuring clean water and safe drinking water. Additionally, the
    Unfunded Mandates Reform Act of 1995 requires EPA to prepare a written
    statement identifying the costs and benefits of federal mandates contained
    in

    1There are also roughly 107,000 noncommunity water systems that may be
    affected by federal drinking water requirements. About 19,000 of these
    systems are located at facilities such as schools, factories, and
    hospitals, which regularly serve at least 25 of the same people at least 6
    months per year. The remaining noncommunity water systems are located at
    facilities, such as gas stations and campgrounds, which serve transient
    populations. 2Some municipalities have separate collection systems for
    wastewater and storm water, and some have combined collection systems.
    Both types may be affected by federal requirements and are included in
    this figure.

    Page 1

    GAO-06-151R Federal Water Requirements

    certain regulations. However, the act does not require EPA to identify the
    cumulative costs and benefits of multiple regulations. As the Congress
    considers legislation to provide more resources to communities to address
    regulatory costs and aging water infrastructure, it is seeking a more
    complete understanding of the federal water requirements affecting local
    communities and the cumulative costs associated with implementing them.

    In this context, you asked us to determine the cumulative cost of federal
    water requirements. In conducting this work, we identified some major
    methodological challenges to developing complete and reliable cost
    information. We subsequently briefed your staffs on these challenges. This
    report summarizes the information provided to your staffs during our
    November 17, 2005, briefing and formally transmits the charts presented
    during that briefing (see enc. I). As requested, this report provides
    information on (1) key federal water requirements that local communities
    are subject to under the Safe Drinking Water Act and the Clean Water Act,
    (2) the extent to which existing studies provide information on the
    cumulative cost of such requirements to communities, and (3) the
    methodological challenges to developing reliable cumulative cost estimates
    attributable to federal water requirements.

    To respond to the first objective, we identified key federal water
    requirements and verified the accuracy and completeness of the list with
    EPA. Under the Safe Drinking Water Act, we included key regulations
    directed at local drinking water systems and excluded regulations that
    focused on analytical methods or provided clarification to existing
    requirements. For the Clean Water Act, we included key regulations that
    typically affect local wastewater treatment plants and municipalities with
    combined or separate storm sewer systems and excluded regulations that are
    specific to particular locations or involve technical clarifications. In
    addition, we met with representatives from more than 10 associations
    representing water and community interests to obtain their views on which
    requirements have had, or will have, the most significant cost impacts on
    local communities. In responding to the second objective, we conducted
    Internet searches and held discussions with EPA, the Congressional Budget
    Office, the Congressional Research Service, associations, and others to
    identify studies that estimated some aspect of costs associated with
    federal water requirements. Overall, we reviewed over 25 studies published
    between 1988 and 2005 and summarized their scope, methodology, and
    findings. For the third objective, we conducted site visits to four
    communities, which we selected on the basis of three criteria: diversity
    in community size and level of complexity, community willingness to
    participate, and diversity of geographic location. During these site
    visits, we met with community and system managers to determine what
    information was available to support cumulative cost estimates, identify
    challenges to developing such estimates, and obtain perspectives on the
    federal water requirements that have had the most significant impact on
    their communities. We supplemented this information with examples of
    methodological challenges identified in existing cost studies and
    perspectives gathered in interviews with EPA, associations, and others. We
    conducted our review from February 2005 to October 2005 in accordance with
    generally accepted government auditing standards.

    Page 2

    GAO-06-151R Federal Water Requirements

    Summary

    The key requirements of the Safe Drinking Water Act and the Clean Water
    Act that communities must meet focus on limiting the exposure of customers
    to contaminants in water supplied by community drinking water systems and
    ensuring that communities prevent pollutants from sewage and diffuse
    sources, such as streets and construction sites, from reaching surrounding
    water bodies. (See enc. II for a list and brief description of these
    federal water requirements.) Under the Safe Drinking Water Act, EPA
    currently regulates over 90 contaminants, such as arsenic and lead, and is
    developing regulations on several more. Generally, as required by the Safe
    Drinking Water Act, EPA's regulations establish a limit, or "maximum
    contaminant level," for specific contaminants and require water systems to
    test the water periodically to determine if the quality is acceptable. If
    contaminant levels are too high, water systems must install new treatment
    technologies or take other measures to address the problem, such as
    finding a new water source. However, if it is not economically or
    technically feasible to ascertain the level of a contaminant, EPA may
    instead establish a treatment technique to prevent known or anticipated
    health effects. Other regulations require water systems to notify the
    public when contaminant levels exceed established limits and provide
    annual reports summarizing the results of all water quality testing. The
    Clean Water Act requires wastewater treatment plants to meet minimum
    technology-based effluent limitations. Plants also may need to implement
    additional, more stringent limitations, including those necessary to meet
    water quality standards. In addition, EPA requires municipalities to
    develop and implement management programs that help prevent pollutants in
    runoff from reaching surrounding bodies of water. In developing these
    plans, communities must adopt certain minimum practices, such as controls
    to reduce or eliminate pollution that collects on streets.

    While many parties, including EPA, various water and community
    associations, and private consulting firms, have developed cost estimates
    for different aspects of maintaining safe, clean water, these estimates
    have not provided information on the cumulative costs of complying with
    federal water requirements, primarily because they were not intended to do
    so. Some studies focus on developing a broad estimate of the costs of
    providing safe drinking water or clean water, but do not attempt to
    separate the costs associated with meeting regulatory requirements from
    other costs. For example, EPA's 2000 Clean Watersheds Needs Survey
    presents the cost of projects needed, nationwide, to address water quality
    and public health problems, which EPA estimated to be $181.2 billion.3 The
    study includes the costs of adding capacity to accommodate population
    growth, replacing aging infrastructure, and complying with requirements in
    its estimates, among other costs, but it does not distinguish the portion
    of the total costs that are associated with meeting federal water
    requirements. In addition, many studies have a narrower scope, focusing on
    estimating costs for a subset of regulatory requirements and particular
    time periods, or estimate costs to different entities (e.g., states,
    private sector). For example,

    3The estimate includes current and projected abatement costs, in 2000 year
    dollars, for projects needed to address water quality or public health
    problems eligible for funding under the Clean Water State Revolving Fund.
    According to EPA, the quality of data informing the estimate was affected
    by the variation in the level of effort states put forth in reporting the
    cost data. We did not independently evaluate the estimation methodology
    for any of the EPA estimates discussed in this report, nor did we evaluate
    the validity or the reliability of the survey and other data used to
    develop these estimates.

    Page 3

    GAO-06-151R Federal Water Requirements

    EPA's 2003 Drinking Water Infrastructure Needs Survey and Assessment
    presents an estimate of current and projected costs, for the time period
    of 2003 to 2022, for drinking water infrastructure investment needs, which
    totals $276.8 billion.4 While EPA did distinguish the portion of the total
    cost attributable to compliance with regulatory requirements ($45.1
    billion),5 the estimates do not include expenditures prior to 2003, and
    only cover regulations under the Safe Drinking Water Act. (See enc. III
    for an abbreviated description of the studies we reviewed.) Similarly,
    although EPA is required to develop cost estimates for some individual
    regulations, by definition, these estimates are narrow in scope. While the
    estimates provide a measure of potential costs to comply with individual
    regulations, which EPA has estimated may reach into the hundreds of
    millions of dollars for some regulations,6 the estimates have been subject
    to criticism for both overestimating and underestimating actual
    implementation costs. Moreover, adding the projected costs of individual
    regulations together to obtain an estimate of actual cumulative cost
    impacts to communities would not provide a meaningful result because,
    among other reasons, the regulatory estimates are prospective, the range
    of uncertainty surrounding them is compounded as they are added together,
    and, in any event, estimates do not exist for all relevant federal water
    requirements.

    Several methodological challenges hinder new efforts to develop reliable
    cumulative cost estimates, including obtaining accurate and complete cost
    data, particularly for older requirements; accurately allocating costs
    (e.g., among jurisdictions that share costs); and establishing a causal
    link between community investments and federal water requirements.
    Therefore, any estimate of the cumulative costs of federal water
    regulations should be viewed in light of the following challenges and
    consequent data limitations.7

    o 	Local communities often lack the institutional knowledge or historical
    records on the costs of treatment technologies or other operational
    changes. As a result, local officials may not be able to provide
    information on the costs associated with installing new treatment
    technologies or making other operational changes, when such changes
    occurred, or why they were made.

    o 	Even when data on the costs of treatment technologies or other
    operational changes are available, local officials often have trouble
    allocating costs attributable to federal water requirements partly because
    accounting systems generally track costs by project rather than by federal
    requirement. Cost

    4The estimate includes costs, in 2003 year dollars, for projects to
    protect public health, preserve the physical
    integrity of water systems, convey treated water to homes and commercial
    and industrial establishments, and
    ensure continued compliance with specific Safe Drinking Water Act
    regulations. According to EPA, there is some
    uncertainty in the estimates due to sampling error and the use of
    statistical cost models and regulatory economic
    analyses.
    5The estimate includes costs, in 2003 year dollars, for projects directly
    attributable to specific Safe Drinking Water
    Act regulations. According to EPA, there is some uncertainty in the
    estimates due to sampling error and the use of
    statistical cost models and regulatory economic analyses.
    6Estimated costs for individual rules can vary widely, and in some
    instances, reach into the hundreds of millions of
    dollars. For example, EPA estimated that the Arsenic Rule would cost
    public water systems between $190 million
    and $227 million annually (in 1999 year dollars, annualized over 20 years
    using a commercial discount rate, which
    approximates 5 percent).
    7Two previous GAO reports, Regulatory Burden: Measurement Challenges and
    Concerns Raised by Selected
    Companies, GAO/GGD-97-2 (Washington, D.C.: November 18, 1996), and
    Unfunded Mandates: Views Vary About
    Reform Act's Strengths, Weaknesses, and Options for Improvement,
    GAO-05-454 (Washington, D.C.: March 31,
    2005) presented similar limitations and concerns regarding the accuracy
    and completeness of regulatory cost
    estimates.

    Page 4

    GAO-06-151R Federal Water Requirements

    allocation is especially difficult when costs are shared by multiple,
    overlapping

    jurisdictions or when communities make system or program changes for

    multiple reasons, such as installing a new treatment technology that both

    meets federal requirements for safe drinking water and improves the
    water's

    aesthetic quality.  o  Establishing a causal link between community
    investments and federal water requirements is also problematic in
    developing cost estimates. First, in some instances, there is no good
    measure of what communities would have done in the absence of federal
    water requirements that can be used as a baseline in developing cost
    estimates. Second, some investments are made in anticipation of potential
    federal requirements rather than in response to finalized ones.
    Consequently, because of the subjective judgments that would have to be
    made, it is difficult to reliably determine how far in advance of a
    requirement an investment can be made and still be attributed to that
    requirement. Third, because some states or regional entities may exercise
    their authority to establish requirements that are more stringent than the
    federal standards, some community investments may include costs beyond
    those fairly attributable to federal requirements. Identifying the federal
    portion of the costs is often not feasible because the authority and
    requirements of the multiple levels of government overlap.

    Information on the cumulative cost of federal water requirements is
    critical in determining the nature and extent of the financial burden on
    local communities. However, given the methodological challenges of
    obtaining accurate and complete cost data, accurately allocating costs,
    and establishing a causal link between community investments and federal
    water requirements, researchers face formidable obstacles in developing a
    reliable cumulative cost estimate.

    Agency Comments and Our Evaluation

    We requested comments on a draft of this report from the Administrator of
    the EPA or his designee. On November 9, 2005, we obtained oral comments
    from officials with EPA's Office of Water, including the Director of the
    Office of Ground Water and Drinking Water, the Deputy Director of the
    Municipal Support Division of the Office of Wastewater Management, and the
    Associate Director of the Water Permits Division of the Office of
    Wastewater Management. They generally agreed with our findings and
    provided some technical comments, which we have incorporated into this
    report where appropriate.

                                         -----

    We are sending a copy of this report to EPA. Copies will be made available
    to others upon request. This report will also be available at no charge on
    GAO's Web site at http://www.gao.gov.

    Page 5

    GAO-06-151R Federal Water Requirements

    If you have any questions about this report or need additional
    information, please contact me at (202) 512-3841 or by e-mail at
    stephensonj@gao.gov. Contact points for our Offices of Congressional
    Relations and Public Affairs may be found on the last page of this report.
    Key contributors to this report include Ellen Crocker, Mark Braza, Nancy
    Crothers, Laura Gatz, Alyssa Hundrup, Richard Johnson, and Mehrzad Nadji.

    John B. Stephenson

    Director, Natural Resources and Environment

    Enclosures - 3

    Page 6

    GAO-06-151R Federal Water Requirements

     Federal Water Requirements: Challenges to Estimating the Cost Impact on Local
                                      Communities

                        A Briefing for Congressional Requesters

                                       Objectives

    o 	Local concerns about the cumulative impact of federal water
    requirements prompted the original request.

    o  Revised objectives:

    o 	What key federal water requirements are local communities subject to
    under the Safe Drinking Water Act (SDWA) and the Clean Water Act (CWA)?

    o 	To what extent do existing studies provide information on the
    cumulative cost of such requirements to communities?

    o 	What are the methodological challenges to developing reliable
    cumulative estimates of costs attributable to federal water requirements?

    To meet our review objectives, we

    o  identified key federal water requirements,

    o  interviewed major stakeholders,

    o  reviewed cost studies, and

    o  conducted site visits to selected communities.

    Figure 1: Local-Level Facilities Subject to Federal Water Requirements
    under SDWA

    Figure 2: Local-Level Facilities Subject to Federal Water Requirements
    under CWA

                                       Background

    o  Local-level facilities subject to federal water requirements:

    o  53,000 community drinking water systems

    o  17,000 municipal wastewater treatment plants

    o 	7,000 communities served by combined sewer systems and separate storm
    sewer systems

                                       Background

    o 	Typical types of operational changes that may be required to comply
    with federal water requirements:

    o  Installing new treatment technologies

    o  Adding new chemicals during treatment

    o 	Identifying a new source of drinking water (e.g., drilling a new well)

    o 	Adopting best management practices, such as sweeping parking lots and
    streets

    Key Requirements Local Communities Are Subject to under SDWA and CWA

    o  SDWA - Most drinking water requirements set limits on

    contaminants; EPA currently regulates over 90. Figure 3: Drinking Water
    Standards, as Applied to Drinking Water Systems

    o 	If it is not economically or technically feasible to ascertain the
    level of a contaminant, EPA may instead establish a treatment technique.

    Figure 4: Key CWA Requirements Included in National Pollutant Discharge
    Elimination System Permits for Municipal Facilities

    Key Requirements Local Communities Are Subject to under SDWA and CWA

    Table 1: Key CWA Requirements Included in NPDES Permits for Municipal
    Separate Storm Sewer Systems and Municipalities with Combined Sewer
    Overflows

    Municipal Separate Storm Sewer System         Combined Sewer System
    (MS4)
          Storm water regulations require     The Combined Sewer Overflow Policy
        municipalities to  o obtain a NPDES   requires municipalities to  o adopt
        permit for all discharges from MS4s   nine minimum control measures and
            and  o develop a storm water      o develop a long-term control plan.
                management program.

    Key Requirements Local Communities Are Subject to under SDWA and CWA

    o 	Community and water associations' views on the requirements that are
    having the most significant cost impact on communities:

    o  Safe Drinking Water Act

    o  Arsenic Rule

    o  Disinfectants and Disinfection Byproducts Rule

    o  Radionuclides Rule

    o  Clean Water Act

    o  Total Maximum Daily Load Program

    o  Storm water regulations

    o  Combined Sewer Overflow Policy

    Figure 5: Some Studies Focus More Broadly on the Costs of Providing Safe
    Water or Clean Water, Rather than on Regulatory Costs Alone

    Extent to Which Existing Studies Provide Cumulative Cost Information

    o  Other studies estimate costs for

    o 	a subset of regulatory requirements, particular time periods, or

    o 	entities other than local communities (e.g., states, private sector).

    Extent to Which Existing Studies Provide Cumulative Cost Information

    o 	EPA is required to develop cost estimates for some regulations, but
    these estimates

    o  focus only on single regulations,

    o  are prospective,

    o 	have been subject to criticism for both overestimating and
    underestimating actual implementation costs, and

    o 	do not provide a meaningful measure of actual cumulative compliance
    costs when added together.

    Methodological challenges hindering new efforts to develop reliable
    cumulative cost estimates:

    o 	obtaining accurate and complete cost data, particularly for older
    requirements

    o 	accurately allocating costs (e.g., among jurisdictions that share
    costs)

    o 	establishing a causal link between community investments and federal
    water requirements

    Challenge 1: Obtaining Accurate and Complete Cost Data

    o 	There is a lack of institutional knowledge or historical records on the
    costs of compliance efforts.

    o 	Example: One community could not provide cost data on past operational
    changes because some records were not readily available.

    A key official with over 20 years of experience said that even with
    project cost information, it would be difficult to determine how much of
    the cost was incurred as a result of federal requirements.

    Challenge 2: Accurately Allocating Costs

    o  Costs are sometimes shared by multiple, overlapping jurisdictions.

    Figure 6: Example of Cost-Sharing among Multiple, Overlapping
    Jurisdictions in One Community We Visited

    (Challenge 2 continued)

    o 	Communities generally track costs by project rather than by federal
    requirement; projects may involve system or program changes that serve
    multiple purposes or impose indirect but related costs.

    o 	Example: One city decided to upgrade its treatment to reduce nitrogen
    levels to meet upcoming NPDES requirements when it expanded its wastewater
    treatment capacity to serve a growing population.

    o 	Example: A county upgraded the biological, or secondary, treatment in
    its wastewater facility in response to a federal requirement. Indirect but
    related costs: (1) building more storage space to handle the additional
    sludge and (2) installing odor controls on the sludge storage tanks to
    comply with the Clean Air Act.

    Methodological Challenges to Developing Reliable Estimates

    Challenge 3: Establishing a Causal Link between Community Investments and
    Federal Water Requirements

    o 	For some requirements, there is no good baseline measure of what
    communities would have done in the absence of such requirements.

    o 	Example: To meet federal storm water requirements, the cities in one
    county are required to sweep streets once a month. The problem in
    allocating costs is determining what the cities would have done in the
    absence of the federal requirement. Some cities would have swept their
    streets anyway.

    Methodological Challenges to Developing Reliable Estimates

    (Challenge 3 continued)

    o 	Some investments are made in anticipation of federal requirements.

    Figure 7: General Process for Development of a Regulation and Points Where
    Communities May Decide to Take an Action That Incurs Costs

    (Challenge 3 continued)

    o 	Example: One community decided to upgrade the biosolids program at its
    wastewater facility before there was a specific federal requirement
    covering the use or disposal of biosolids. A community official told us
    that the change was made in anticipation of the federal requirement.

    o 	Example: When another community constructed a new wastewater facility
    to accommodate population growth, it opted to install a filter, not
    because it was needed to meet any existing NPDES permit limits, but
    because it anticipated that future federal requirements could necessitate
    more advanced treatment.

    (Challenge 3 continued)

    o 	Some states or regional entities may exercise their authority
    toestablish requirements that are more stringent than the federal criteria
    (e.g., water quality standards, storm water requirements).

    Figure 8: Authority for Establishing Water Quality Standards and Effluent
    Limits

    (Challenge 3 continued)

    Figure 9: Multiple Regulatory Layers Affect the Impact of Federal Water
    Requirements on Communities

    Enclosure II

        Key Federal Requirements Local Communities Are Subject to under the Safe
                                   Drinking Water Act

    Title Date Local-level systems covered Principal requirements promulgated
    or proposeda Disinfection Byproduct Regulations

    Trihalomethanes November 29,    Community water    Establishes a maximum
                                        systems that      contaminant
            Rule               1979 serve 10,000 or more          level (MCL) and
                                         people and         associated monitoring
                                    add a disinfectant to      and reporting
                                    their treatment       requirements for total
                                           process            trihalomethanes

    Stage 1 Disinfectants December 16, Community water systems and Builds upon
    and expands the

    and Disinfection 1998 nontransient, noncommunity water Trihalomethanes
    Rule; establishes

    Byproducts Rule	systems that treat their water with a standards for three
    disinfectants, two chemical disinfectant; certain groups of organic
    disinfection requirements for one disinfectant byproducts, and two
    inorganic apply to transient noncommunity disinfection byproducts water
    systems.

    Stage 2 Disinfectants Proposed Community water systems and and
    Disinfection August 18, nontransient, noncommunity water Byproducts 2003
    systems that add a disinfectant

    other than ultraviolet light or deliver water treated with a disinfectant
    other than ultraviolet light Would augment the Stage 1 Disinfectants and
    Disinfection Byproducts Rule in part in response to new information
    concerning the health effects of disinfection byproducts; requires systems
    to evaluate their distribution systems to identify locations with high
    disinfection byproduct concentrations (locations will then be used by the
    systems as the sampling sites for disinfection byproduct compliance
    monitoring); alters method of calculating compliance with disinfection
    byproduct MCLs to reduce exposure to peak disinfection byproduct
    concentrations

    Microbial Contaminant Regulations

    Surface Water  June 29, Public water systems     Establishes maximum level
                                     that use                         contaminant
    Treatment Rule     1989   surface water or   goals for Giardia lamblia,
                                   ground water     viruses, and
                                 under the direct   Legionella, and establishes
                                   influence of     treatment
                                  surface water     technique requirements to
                                                    protect
                                                    against the health effects of
                                                                      exposure to
                                                    these contaminants (by
                                                    establishing
                                                             criteria under which
                                                          filtration is required,
                                                    as well as disinfection
                                                    requirements)

    Total Coliform June 29, Public water  Sets an MCL, monitoring requirements
            Rule                 systems
                          1989               (which are based on the population
                                             served), and analytical requirements
                                                                              for
                                                total coliform bacteria; requires
                                                                          routine
                                                   monitoring by all public water
                                                                         systems,
                                             periodic sanitary surveys for small
                                               systems, and additional monitoring
                                                                              for
                                                systems that detect coliform
                                                        contamination

                 Page 31 GAO-06-151R Cost of Federal Water Requirements

    Enclosure II

           Interim     December 16, Public water systems  Requires large systems
          Enhanced                       that serve             to control
        Surface Water          1998   more than 10,000   microbial contaminants,
                                       people and use          particularly
    Treatment Rule                 surface water or   Cryptosporidium; sets a
                                        ground water             maximum
                                      under the direct    contaminant level goal
                                        influence of               for
                                       surface water       Cryptosporidium; and
                                                              builds on the
                                                              treatment technique
                                                              requirements of the
                                                         Surface Water Treatment
                                                                   Rule
    Filter Backwash June 8, 2001 Public water systems Adds further protections
                                          that use              to ensure
    Recycling Rule                 surface water or   treatment processes
                                        ground water     effectively remove
                                      under the direct   Cryptosporidium by
                                        influence of     requiring systems
                                     surface water, use  to review their recycle
                                         direct or            practices and,
                                        conventional      where appropriate, make
                                         filtration                 any necessary
                                         processes,
                                    and recycle certain  changes to recycle
                                    process waters       practices that may
                                                           compromise microbial
                                                                 control

         Long Term 1   January 14,    Public water     Requires small systems to
                                   systems that serve           improve
          Enhanced            2002 fewer than 10,000      control of microbial
           Surface                 and use surface           contaminants,
    Water Treatment               water or ground          particularly
                                     water under the      Cryptosporidium, by
            Rule                   direct influence of   strengthening filtration
                                      surface water              requirements and
                                                       addressing risk trade-offs
                                                                  with
                                                       disinfection byproducts;
                                                       builds on the
                                                          treatment technique
                                                              requirements
                                                         established for large
                                                             systems in the
                                                        Interim Enhanced Surface
                                                                 Water
                                                             Treatment Rule

    Ground Water     Proposed   Public water    Establishes treatment
           Rule                  systems that use  techniques for
                    May 10, 2000   ground water        systems using groundwater;
                                                                        specifies
                                                   the appropriate use of
                                                   disinfection in
                                                   ground water, requires surveys
                                                   and
                                                    assessments, and requires any
                                                                           system
                                                   with significant deficiencies
                                                   to take
                                                         corrective actions

    Long Term 2 Proposed Public water systems that use Enhanced Surface August
    11, surface water or ground water Water Treatment 2003 under the direct
    influence of Rule surface water Builds upon the treatment techniques for
    Cryptosporidium that were established for large systems by the Interim
    Enhanced Surface Water Treatment Rule and for small systems by the Long
    Term 1 Enhanced Surface Water Treatment Rule; requires source water
    monitoring for Cryptosporidium, additional Cryptosporidium treatment for
    filtered systems, and inactivation of Cryptosporidium by unfiltered
    systems

    Other Contaminant Regulations

        Fluoride Rule   April 2, 1986   Community water       Sets an MCL for
                                            systems              fluoride
          Phase I -                     Community water    Establishes MCLs for
          Synthetic      July 8, 1987     systems and         eight volatile
           Organic                    nontransient,          synthetic organic
          Chemicals                   noncommunity water         chemicals
             Rule                           systems
          Phase II -      January 30, Primarily community   Establish MCLs for 26
          Synthetic                   water systems             synthetic organic
           Organic               1991  and nontransient,  chemicals and 7
          Chemicals                      noncommunity     inorganic chemicals
        and Inorganic                    water systems
    Chemicals Rules

    Lead and June 7,   Community water   Establishes maximum contaminant level
        Copper     1991     systems and
         Rule           nontransient,           goals for lead and copper and
                        noncommunity water
                              systems       establishes "action levels" that,
                                            when
                                            exceeded, trigger treatment technique
                                              requirements (including corrosion
                                             control treatment, public education,
                                                                             and,
                                              under some circumstances, source
                                            water treatment and lead service line

                 Page 32 GAO-06-151R Cost of Federal Water Requirements

    Enclosure II

                                      replacement)

           Phase V -     July 17, Community water systems Establishes MCLs for 18
           Synthetic     1992               and                         synthetic
    Organic Chemicals          nontransient,           organic chemicals and 5
                                  noncommunity water                    inorganic
         and Inorganic                    systems                chemicals
        Chemicals Rule

         Information   May 14, Large public water Required systems to collect and
                          1996      systems       report
    Collection Rule         (surface water      information on the occurrence
                               systems serving at               of
                               least 100,000 and      disinfectant residuals,
                                  ground water             disinfection
                               systems serving at byproducts, and disease-causing
                                 least 50,000)
                                                       microorganisms in drinking
                                                                     water and on
                                                  the effectiveness of various
                                                  treatment
                                                  technologies to reduce levels
                                                  of these
                                                  contaminants; this data
                                                  collection effort
                                                     is complete and no longer
                                                              imposes
                                                     requirements on systems.

    Radionuclides Rule December 7, Community water systems Sets an MCL for
    uranium and revises 2000 monitoring requirements for other radionuclides

    Arsenic Rule January 22, Community water systems and Establishes a new MCL
    for arsenic 2001 nontransient, noncommunity water systems

    Radon Rule    Proposed Community water systems   Proposes two options: (1)
                              that use                               developing a
                  November 2,  ground water or mixed  multimedia mitigation
                                      ground          program at the
                         1999 water and surface water state level to reduce radon
                                                                    in indoor air
                                                       or (2) developing a local
                                                              program to
                                                      reduce radon in water to a
                                                                greater
                                                                extent

    Customer Awareness Regulations

            Consumer      August 19, Community water Requires systems to prepare
                                         systems                 and
    Confidence Reports       1998                  provide to their customers
                                                                annual
              Rule                                      confidence reports on the
                                                                   quality of the
                                                        water delivered by the
                                                               systems

    Public Notification May 4, 2000 Public water    Requires systems to notify
                                         systems                    the people it
              Rule                                    serves of (1) violations of
                                                                   drinking water
                                                      regulations, (2) applicable
                                                                    variances and
                                                              exemptions from the
                                                             regulations, and (3)
                                                        other situations posing a
                                                                   risk to public
                                                      health from the drinking
                                                               water;
                                                         establishes minimum
                                                            requirements
                                                      regarding the form, manner,
                                                                       frequency,
                                                      and content of the public
                                                            notification

    Notes:

    Public water system is a water system that regularly supplies drinking
    water to at least 15 service connections or 25 people daily for at least
    60 days a year. A public water system is either a "community water system"
    or a "noncommunity water system."

    Community water system is a public water system that serves at least 15
    service connections used by year-round residents or regularly serves at
    least 25 year-round residents.

    Transient noncommunity water system is a public water system that does not
    regularly serve at least 25 of the same people at least 6 months per year
    (e.g., gas stations, campgrounds).

    Page 33 GAO-06-151R Cost of Federal Water Requirements

    Enclosure II

    Nontransient noncommunity water system is a public water system that
    regularly supplies water to at least 25 of the same people at least 6
    months per year (e.g., schools, factories, office buildings, and hospitals
    that have their own water systems).

    a

    Date of proposal is given for rules not yet finalized.

    Page 34 GAO-06-151R Cost of Federal Water Requirements

    Enclosure II

    Key Federal Requirements Local Communities Are Subject to under the Clean Water
                                          Act

    NPDES program areas Date Municipal systems/facilities Key requirements and
    requirements promulgated covered

    Secondary treatment standards

    Secondary  August 17,  Publicly owned         Establish required levels of
    Treatment             treatment works                             effluent
    Standards    1973 (as     (POTW)a         quality based on the quality
                    amended)                      achievable by secondary, or
                                                     biological, treatment

    Water quality and technology-based permitting

         Surface Water    July 24, States are directly      Specifies that states
             Toxics           1992       covered;                     must submit
        Control Program            POTWs discharging to  their lists of impaired
              and                        impaired                waters,
         Water Quality                 b waters are     including waters targeted
            Planning               indirectly affected.                 for total
         and Management                                 maximum daily load (TMDL)
    Program (governing                                development to EPA every
                                                                          2 years
    regulation for the                               and provide documentation
             Total                                      to
    Maximum Daily Load                                     support the states'
                                                                  determinations;
            Program)                                     eventually, POTWs could
                                                                   be
                                                        required to meet more
                                                        stringent
                                                        limits on the discharge
                                                        of some
                                                               pollutants.

            Monitoring      August 4,  POTWs and other     Require monitoring for
                            1999       treatment works              certain toxic
         Requirements for             treating domestic and other pollutants; the
                                           sewage       extent of
          Publicly Owned                                     pollutant monitoring
                                                                  required varies
    Treatment Works and                                    by POTW size.
         Other Treatment
              Works
        Treating Domestic
              Sewage

           Effluent                  Municipalities that                Establish
          Limitations    January 19, (1) own or operate          technology-based
                                                                         effluent
          Guidelines,           2000    new or existing        limitations for
                                          hazardous or           wastewater
         Pretreatment                nonhazardous landfill  discharges associated
          Standards,                       facilities             with the
                                     regulated,                 operation and
        and New Source               respectively, under       maintenance of
                                     Subtitle
          Performance                 C and Subtitle D of      these landfill
           Standards                      the Resource           facilities
    for the Landfills                Conservation and
             Point                      Recovery Act and
        Source Category                 (2) collect and
                                       discharge landfill
                                      generated wastewater
                                           to surface
                                      waters of the United
                                         States (unless
                                       the landfills are
                                      directly associated
                                     with other industrial
                                         or commercial
                                          facilities)

    NPDES - Final Regulations to Establish Requirements for Cooling Water
    Intake Structures at Phase II Existing Facilities

    July 9, 2004 	Facilities (including municipally owned facilities) existing
    prior to January 17, 2002, that (1) are point sources; (2) as their
    primary activity both generate and transmit electric power or generate
    electric power for sale to another entity for transmission; (3) use or
    propose to use one or more cooling water intake structures with a total
    design intake flow of 50 million gallons per day or more to withdraw water
    from waters of the United States; and (4) use 25 Establish national
    performance standards based on the best available technology to protect
    aquatic organisms from being killed or injured by cooling water intake
    structures

                 Page 35 GAO-06-151R Cost of Federal Water Requirements

    Enclosure II

                percent of water withdrawn exclusively for cooling water

    Combined sewer overflows

    Combined Sewer

    April 19, 1994 Combined sewer systems that

    Overflow Control Policy, Codified by the Consolidated Appropriations Act
    for Fiscal Year 2001 overflow as a result of wet weather events
    Establishes a consistent national approach for controlling discharges from
    combined sewer overflows to the nation's waters; among other things,
    municipalities must implement minimum technologybased controls and develop
    longterm combined sewer overflow plans to meet water quality standards.

    Municipal separate storm sewer systems National pretreatment program
    Biosolids (sewage sludge)

        Permit Application  November 16,  Discharges from     Require large and
                                          large and medium         medium
         Regulations for            1990 municipal separate    municipal separate
              Storm                         storm sewer             sewer systems
         Water Discharges                  systems (those         to obtain NPDES
                                         serving more than      permits for storm
    (Phase I Storm Water               100,000 people)    water discharges and
                                                                    set forth the
           Regulations)                                       required components
                                                                     of municipal
                                                            storm water quality
                                                            management
                                                                    plans

        Regulations for  December 8,   Discharges from small   Extend storm water
           Revision                          municipal            requirements to
         of the Water           1999 separate storm sewer      smaller municipal
           Pollution                 systems (those            separate storm
        Control Program              serving less than 100,000   sewer systems
                                              people)
    Addressing Storm
             Water
    Discharges (Phase
              II
          Storm Water
         Regulations)

         General Pretreatment   June 26, 1978, POTWs  Require most major POTWs to
    Regulations for Existing     as amended              develop a locally run
                                                                     pretreatment
           and New Sources         January 28,          program to ensure that
                                          1981           nondomestic users of the
                                                                        municipal
                                                          system have controls in
                                                                         place to
                                                         prevent the introduction
                                                                             into
                                                         POTWs of pollutants that
                                                                             will
                                                     interfere with operations or
                                                                             pass
                                                       through the POTW untreated

    Standards for February 19,  POTWs and other     Establish requirements for
          Use or                   treatment works                      the final
         Disposal            1993 treating domestic    use and disposal of sewage
                                    sewage sludge                         sludge;
                                                    numerical limits on the
                                                    pollutant
                                                    concentrations in sewage
                                                    sludge;
                                                    management practices; and, in
                                                       some cases, operational
                                                            requirements

    a

    A POTW is a state or municipally owned system or device used to store,
    treat, recycle, or reclaim municipal sewage or liquid industrial wastes.
    The term includes treatment plants. b If a state lists a water body as
    impaired, it must eventually develop, for each pollutant causing an
    impairment, a TMDL-the amount of the pollutant that the water body can
    receive, taking into account seasonal variations and a margin of safety,
    and still meet water quality standards. To implement a TMDL, states
    allocate pollutant loadings among specific sources, such as local
    wastewater treatment plants, and incorporate the loads into the state's
    water quality management plans and NPDES permits.

    Page 36 GAO-06-151R Cost of Federal Water Requirements

    Enclosure III

    Summary of Selected Cost Studies

                                   Title Description

    EPA studies

    Drinking Water Infrastructure The purpose of this study was to estimate
    the national infrastructure needs for public Needs Survey and Assessment:
    drinking water systems. EPA conducted a survey to project the estimated
    costs, for the Third Report to Congress, EPA, time period of 2003 to 2022,
    for the approximately 75,000 public water systems eligible 2005. to
    receive assistance from the Drinking Water State Revolving Fund. The
    assessment

    includes costs needed to protect public health, preserve the physical
    integrity of water systems, convey treated water to homes and commercial
    and industrial establishments, and ensure continued compliance with
    specific Safe Drinking Water Act regulations. EPA also conducted similar
    surveys in 1995 and 1999.

    Report to Congress: Impacts and This report documents the extent of human
    health and environmental impacts caused by

    Control of CSOs and SSOs, EPA, municipal combined sewer overflows (CSO)
    and sanitary sewer overflows (SSO),

    2004. 	including the location of discharges causing such impacts, the
    volume of pollutants discharged, the resources spent by municipalities to
    address these impacts and the projected costs to reduce CSOs and SSOs, and
    the technologies used by municipalities to address these impacts. EPA
    reported expenditures, primarily for infrastructure investments such as
    sewer system replacement and rehabilitation, going back to 1970 and
    projected future needs over a 20-year period.

    Clean Watersheds Needs Survey The purpose of this study was to estimate
    the total national need for water quality

    2000: Report to Congress, EPA, programs and projects under the Clean Water
    Act. EPA conducted a survey to estimate

    2003. 	the costs for needs that existed as of January 1, 2000; had an
    indeterminate future time frame; and were eligible for Clean Water State
    Revolving Fund assistance. EPA collected documentation from facilities
    involved with water quality management, such as wastewater treatment
    plants and municipal separate storm sewer systems. The assessment includes
    projected costs for wastewater treatment, collection, and conveyance; CSO
    correction; storm water management programs; and nonpoint source pollution
    control. EPA conducted a similar assessment in 1996 and has collected
    information about Clean Water Act needs since 1972.

    Community Water System Survey This report summarized information from a
    survey of a nationally representative sample

    2000, EPA, 2002. 	of community drinking water systems on their financial
    and operating characteristics. The survey collected information from water
    systems on such characteristics as the source of their water; the size of
    their system; and the capital expenditures they made over a 5year period.
    EPA conducted similar surveys in 1976, 1982, 1986, and 1995.

    The Clean Water and Drinking The purpose of this study was to estimate the
    gap between projected clean water and Water Infrastructure Gap Analysis,
    drinking water investment needs, over the 20-year period from 2000 to
    2019, including EPA, 2002. needs related to regulatory compliance, and
    levels of spending at the time the analysis

    was conducted. The scope of the report includes both capital and
    operations and maintenance costs for all clean water and drinking water
    services. The analysis used the clean water and drinking water needs
    surveys (see above) as a starting point and then made adjustments, based
    on several alternative assumptions.

    The National Costs of the Total This report estimates the national costs
    of developing and implementing the Total Maximum Daily Load Program
    Maximum Daily Load (TMDL) Program, under the Clean Water Act. EPA
    calculated the (Draft Report), EPA, 2001. annual costs to states and EPA
    for listing impaired waters and developing TMDLs. EPA

    also estimated the annual costs to pollutant sources-such as industrial
    dischargers and wastewater treatment plants-to implement the TMDLs for the
    approximately 20,000 impaired waters that were identified at the time of
    the study.

    A Retrospective Assessment of This study estimates the nationwide costs of
    water pollution abatement expenditures by
    the Costs of the Clean Water Act: both public and private entities under
    the Clean Water Act. The analysis focuses on the
    1972 to 1997, prepared for EPA by incremental annual costs of requirements
    under the Clean Water Act between 1972 and
    George Van Houtven, Smita 1997.
    Brunnermeier, and Mark Buckley,
    Center for Economics Research,
    2000.

    Estimates of the Total Benefits The purpose of this study was to estimate
    the total benefits and costs for all of the and Total Costs Associated
    with drinking water regulations specified in the 1986 Amendments to the
    Safe Drinking Water Implementation of the 1986 Act. The regulations
    included in the analysis cover: volatile organic chemicals, fluoride,
    Amendments to the Safe Drinking the surface water treatment rule, the
    total coliform rule, the lead and copper rule, phase

    Page 37 GAO-06-151R Federal Water Requirements

    Enclosure III

    Water Act, prepared for EPA by II inorganic and synthetic organic
    chemicals, radionuclides, disinfection requirements, Wade Miller
    Associates, Inc., phase V inorganic and synthetic organic chemicals, and
    arsenic. The study presented 1990. aggregate national-scale costs for
    implementing these rules on an annual basis in

    addition to providing cost-benefit comparisons for the regulations at the
    individual water system level and at the household level. Similar studies
    were conducted in 1987 and 1989.

    Environmental Investments: The This summary report presents data on
    environmental pollution control costs from 1972 Cost of a Clean
    Environment: A through 1987 and then projects the costs for each
    subsequent year to the year 2000 Summary, EPA, 1990. under a number of
    different scenarios. Cost estimates are included for actions taken

    pursuant to each of the major federal environmental pollution control
    statutes (including the Clean Water Act and Safe Drinking Water Act).
    Separate costs were developed for each of the various environmental media,
    including air, water, land, and useful chemicals (such as pesticides).
    Cost estimates were also broken down by the economic sector that would
    directly incur the cost, including EPA, other federal agencies, state and
    local government, and the private sector. This report summarizes data
    presented in a much more detailed report also issued in 1990 entitled
    Environmental Investments: The Cost of a Clean Environment, Report of the
    Administrator of the Environmental Protection Agency to the Congress of
    the United States.

    The Municipal Sector Study: This study examined the impacts of 22
    environmental regulations that municipalities Impacts of Environmental
    have to comply with, including 11 drinking water regulations, 3 wastewater
    treatment Regulations on Municipalities, regulations, and 1 storm water
    management regulation. EPA calculated the impacts by EPA, 1988. looking at
    the projected increases in user charges (e.g., charges for water and sewer

    services) per household, and the ability of municipalities to raise needed
    capital to

    comply with the additional requirements.

    Studies by other federal agencies

    Draft 2005 Report to Congress on

    This report provides an estimate of the total costs and benefits of
    regulations reviewed

    the Costs and Benefits of Federal Regulations, Office of Management and
    Budget, 2005.

    by the Office of Management and Budget (OMB), including a 10-year
    retrospective of major federal regulations reviewed by OMB, a historical
    examination of the trends in federal regulatory activity, and discussion
    of the implementation of the Information Quality Act. OMB's estimates are
    based on cost estimates found in the agencies' regulatory impact analyses.
    Federal regulations, including those under the Clean Water Act and Safe
    Drinking Water Act, were included if, in general, they were projected to
    have the potential for a significant impact.a OMB issues similar reports
    on a yearly basis.

    Future Investment in Drinking This study provides background information
    on the nation's water systems; presents Water and Wastewater estimates of
    future costs for water infrastructure under two scenarios, a low-cost case
    Infrastructure, Congressional and high-cost case; and discusses broad
    policy options for the federal government to Budget Office, 2002. support
    water infrastructure development. The cost estimates are for the annual

    infrastructure funding needs of drinking water and wastewater systems for
    the period 2000 to 2019. These needs include capital costs and operations
    and maintenance costs, which include costs related to regulatory
    compliance.

    The Safe Drinking Water Act: A This study looked at the costs and benefits
    of treating drinking water according to the Case Study of an Unfunded
    standards set under the Safe Drinking Water Act as a case study of federal
    mandates. Federal Mandate, Congressional Among other things, the study
    examined whether the act, at the time the analysis was Budget Office,
    1995. completed, had imposed large costs on households, had costs that
    exceed benefits, and

                  had imposed a large fiscal burden on municipalities.

    Studies by other entities

    Impact of Unfunded Federal This report provides information on the survey
    the U.S. Conference of Mayors conducted
    Mandates and Cost Shifts on U.S. to collect cost information on several
    federal mandates and requirements, including the
    Cities: A Preliminary Report on Safe Drinking Water Act and the Clean
    Water Act. A total of 59 cities provided
    Costs in 59 Cities, The United information on their recurring annual costs
    and any one-time costs associated with the
    States Conference of Mayors, mandate for the most recent fiscal year for
    which the information was available. The U.S.
    2005. Conference of Mayors also conducted a similar survey in 1993.

    a

    All final rules promulgated by an Executive branch agency were included if
    the rule met any one of the following measures: rules designated as
    "economically significant" under section 3(f)(1) of Executive Order 12866;
    rules designated as "major" under 5 U.S.C. 804(2); and rules designated as
    meeting the threshold under 2 U.S.C. 1532.

    Page 38 GAO-06-151R Federal Water Requirements

    Enclosure III

    Unfunded Mandates: A Snapshot The purpose of this report was to provide
    information on the impact of unfunded Survey, National Association of
    mandates on county governments. The Association collected cost information
    for 10 Counties, 2005. federal mandates, including the Safe Drinking Water
    Act and the Clean Water Act, by

    surveying member counties from across the country on their estimated costs
    to comply with each of the mandates for fiscal years 2003, 2004, and
    projected 2005. The Association also conducted a similar survey in 1993.

    Safe Drinking Water Act: Costs of This paper examines the national costs
    associated with federal drinking water Compliance, Robert S. Raucher
    regulations issued as a result of the 1996 Safe Drinking Water Act
    amendments. and John Cromwell, Mercatus Building on EPA's cost estimates
    published for each individual regulation and other Center, George Mason
    University, available research, the study presents cost estimates for each
    major national rule 2004. finalized under the act since the 1996
    amendments. The cost estimates are then

    aggregated, along with estimates for regulations issued before 1996, to
    come up with a

    total cost estimate for drinking water regulations issued since 1986.

    The Cost of Regulations The purpose of this study was to estimate the cost
    of implementing water pollution Implementing the Clean Water control
    regulations under the Clean Water Act between 1972 and 2001. Cost
    estimates Act, Joseph M. Johnson, Mercatus were developed for both the
    government (including state and local) and the private Center, George
    Mason University, sector. Estimates were largely based on government and
    private expenditure data 2004. collected through the U.S. Census Bureau's
    Pollution Abatement and Control

    Expenditures survey.

    Census Data Shed Light on U.S. This study analyzes U.S. Census Bureau data
    from the Public Use Microdata Areas to
    Water and Wastewater Costs, estimate the cost of water and wastewater
    service for households with various
    Scott J. Rubin, American Water characteristics, such as annual household
    income, type of housing unit, and size of the
    Works Association Journal, April, housing unit.
    2005.

    Dawn of the Replacement Era: This report estimates the funding that may be
    needed over a 30-year period, nationwide,
    Reinvesting in Drinking Water for the replacement of worn-out drinking
    water pipes and associated drinking water
    Infrastructure, American Water infrastructure. The estimate is based on an
    analysis of 20 utilities geographically
    Works Association, 2001. distributed throughout the nation.

    The AMSA 2002 Financial Survey: The purpose of this study was to report on
    current practices in financing and managing A National Survey of Municipal
    public wastewater treatment agencies across the nation. The Association of
    Wastewater Management Metropolitan Sewerage Agencies, an association that
    represents public wastewater Financing and Trends, Association treatment
    agencies, surveyed a sample of its membership on general utility
    information, of Metropolitan Sewerage such as the size of service area and
    the volume of treatment; financial information, such Agencies, 2002. as
    capital improvement needs; rate information, including the rate structure
    used; and

    staffing and salary information, such as number of staff and licensing
    requirements. The

    2002 survey updates and expands on eight previous surveys conducted since
    1981.

    Clean and Safe Water for the 21st Century: A Renewed Commitment to Water
    and Wastewater Infrastructure, Water Infrastructure Network, 2000.

    Implementing a Regulatory Budget: Estimating the Mandated Private
    Expenditure of the Clean Air Act and Safe Drinking Water Act Amendments,
    Harvey S. James, Center for the Study of American Business, Washington
    University, Working Paper 161, August 1996.

    This report discusses the value of clean and safe drinking water and
    wastewater; provides a historic and future perspective on investments to
    water and wastewater infrastructure systems; estimates the cost of
    building, operating, and maintaining needed drinking water and wastewater
    facilities over a 20-year period; and discusses the federal role in
    financing water and wastewater infrastructure projects. This study
    examines the various problems that arise in measuring regulatory costs
    and, in that light, proposes a feasible methodology for carrying out a
    regulatory budget. The methodology was then applied to the recent
    amendments of the Clean Air Act and the Safe Drinking Water Act to assess
    the feasibility of administering a regulatory budget. In conducting the
    study, the author estimated the compliance costs of the Clean Air and Safe
    Drinking Water Acts, which for the Safe Drinking Water Act included
    compiling data from EPA and American Water Works Association estimates for
    the rules authorized by the 1986 amendments.

      Note: We did not include studies specific to state and local entities in our
                                        review.

    (360591)

                     Page 39 GAO-06-151R Federal Water Requirements

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