Water Infrastructure Financing Legislation: Comparison of S. 2550 and H.R. 1560

Order Code RL32503

CRS Report for Congress

Received through the CRS Web

Water Infrastructure Financing Legislation:

Comparison of S. 2550 and H.R. 1560

July 27, 2004

name redacted and name redacted

Specialists in Environmental Policy

Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

Water Infrastructure Financing Legislation:

Comparison of S. 2550 and H.R. 1560

Summary

This report provides a side-by-side comparison of two major bills in the 108th

Congress concerning water infrastructure project financing. It compares provisions

of S. 2550, the Water Infrastructure Financing Act, which would amend the Clean

Water Act (CWA) and the Safe Drinking Water Act (SDWA), and H.R. 1560, the

Water Quality Financing Act of 2003, which would amend only the CWA. H.R. 1560

was approved by a House Transportation and Infrastructure subcommittee on July 17,

2003; S. 2550 was approved by the Senate Environment and Public Works

Committee on June 23, 2004.

The CWA and SDWA provisions in these two bills principally involve the

portions of those laws that authorize federal financial assistance to State Revolving

Loan Funds (SRFs) for purposes of building and upgrading wastewater treatment and

drinking water treatment facilities. Congress established the CWA SRF program in

1987 and the SDWA SRF program in 1996. Under both, federal capitalization grants

are provided as seed money for state-administered loan programs. Communities

repay loans to the state, providing a source of capital for future loans and other

investments. Both laws contain provisions that specify requirements for states to

establish SRFs and requirements that apply to the SRF’s operation, such as plans and

reporting. Both define categories of projects eligible for assistance, who may receive

assistance, and types of assistance activities.

A key intention of both bills is to extend SRF authorizations. S. 2550 authorizes

$35 billion for FY2005-FY2009 for capitalization grants ($20 billion for the CWA

SRF, $15 billion for the SDWA SRF). H.R. 1560 authorizes $20 billion for CWA

SRF capitalization grants for FY2004-FY2008. In addition, both would conform the

two laws in several respects. For example, the SDWA currently allows states to offer

additional subsidization to disadvantaged communities and longer loan repayment

periods, and both bills would add similar provisions to the CWA.

The bills are not identical, however. In some cases, they take different

approaches to an issue, such as how to revise the formula for state-by-state allotment

of CWA SRF capitalization grants. S. 2550 includes provisions that would apply

prevailing wage requirements of the Davis-Bacon Act to projects that receive SRF

funding, and it includes a new grant program to assist small community drinking

water projects, as well as grant programs to address lead contamination in schools

and in the District of Columbia. H.R. 1560 includes provisions requiring

communities to plan for capital replacement needs and to implement an asset

management plan for the repair and maintenance of infrastructure.

Future prospects for the legislation are uncertain for several reasons, including

controversies over application of the Davis-Bacon Act, Administration opposition

to funding levels in the bills, limited legislative time remaining in the 108th Congress,

and the lack of House consideration of a counterpart to the SDWA provisions of S.

2550. This report will be updated as warranted.

Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Table 1. Comparison of Water Infrastructure Legislation . . . . . . . . . . . . . . . . . . 5

Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Recipients Eligible for Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Projects Eligible for Assistance, Types of Assistance . . . . . . . . . . . . . . 6

SRF Grants Set-Aside Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Fund Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Extension of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Additional Subsidization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Financial Assistance to Small Systems from the SRF . . . . . . . . . . . . . 10

Technical Assistance to Small Systems from the SRF . . . . . . . . . . . . 11

Technical Assistance Grants for Rural and Small Treatment Works . 11

State Administrative Costs Set-Aside . . . . . . . . . . . . . . . . . . . . . . . . . 12

Reservation of Funds for Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Cross-Cutting Requirements; Labor Standards . . . . . . . . . . . . . . . . . . 13

Requirements for Receipt of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Priority System Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Allotment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

SRF Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Cross-Collateralization between CWA and SDWA SRFs . . . . . . . . . 18

SRF Set-Aside for Indian Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

SRF Review Process — Assistance for Accessing the SRF . . . . . . . . 19

Reports: Needs Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Removal of Lead from Drinking Water in Schools . . . . . . . . . . . . . . . 20

Lead Contamination in Drinking Water in the District of Columbia . 21

Small Public Water System Grant Program . . . . . . . . . . . . . . . . . . . . . 22

Pilot Program for Alternative Water Source Projects . . . . . . . . . . . . . 25

Sewer Overflow Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Watershed Pilot Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

National Estuary Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Sewage Control Technology Grant Program . . . . . . . . . . . . . . . . . . . . 27

Demonstration Program for Water Quality Enhancement

and Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Southeast Colorado Safe Drinking Water Supply . . . . . . . . . . . . . . . . 28

Environmental Finance Centers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Cost of Service Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Assessment of Perchlorate Contamination . . . . . . . . . . . . . . . . . . . . . 31

Special Water Resources Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Water Infrastructure Financing Legislation:

Comparison of S. 2550 and H.R. 1560

Introduction

This report provides a side-by-side comparison of two major bills in the 108th

Congress concerning water infrastructure project financing. It compares provisions

of S. 2550, the Water Infrastructure Financing Act, which would amend both the

Clean Water Act (CWA, 33 U.S.C. 1251 et seq.) and the Safe Drinking Water Act

(SDWA, 42 U.S.C. 300f et seq.), and H.R. 1560, the Water Quality Financing Act

of 2003, which would amend only the CWA. While a number of bills that address

water infrastructure project financing have been introduced, these two measures are

the focus of legislative activity in the 108th Congress. This report also describes

relevant provisions of current law that would be affected or modified by the bills.

The CWA and SDWA provisions that these two bills would amend are

principally the portions of those laws that authorize federal financial assistance to

State Revolving Loan Funds (SRFs) for purposes of building and upgrading

wastewater treatment and drinking water treatment facilities, respectively. At the

federal level, the SRF programs in the laws are administered by the Environmental

Protection Agency (EPA). Under the programs in both laws, federal capitalization

grants are provided as seed money for state-administered loan programs. Recipients

repay loans to the state, enabling the state to build up a source of capital for future

loans and other investments. Thus, monies in the SRF consist of federal

capitalization grants from congressional appropriations, required state matching

funds (20% of a capitalization grant), and loan repayments. Congress established the

CWA SRF program in 1987 (P.L. 100-4), replacing what previously had been a

CWA program of grants to municipalities. Before 1996, the SDWA had not

authorized federal assistance for drinking water treatment facilities, but in that year,

Congress established the SDWA SRF program (P.L. 104-182), modeling it after the

CWA program, while also refining it to reflect experiences gained during the early

implementation of P.L. 100-4. (For background information, see CRS Report

RL31116, Water Infrastructure Funding: Review and Analysis of Current Issues.)

A key intention of both of the current bills is to extend and increase SRF

authorizations, because estimates by states and EPA of funding needed by wastewater

and water utilities to comply with the two acts exceed $330 billion. Needs estimates

by other groups are even higher. In the case of the CWA program, authorizations

under the 1987 law expired at the end of FY1994, while authorizations for the

SDWA SRF program expired at the end of FY2003. However, Congress has

continued to appropriate monies for capitalization grants each year for both since

their authorizations expired.

CRS-2

More recently, legislative activity concerning water infrastructure issues has

been undertaken in the 107th and 108th Congresses. House and Senate committees

held oversight hearings on water infrastructure financing issues during the first

session of the 107th Congress, and in the second session, the House Transportation

and Infrastructure Committee approved H.R. 3930. No committee report was filed.

The Senate Environment and Public Works Committee approved and reported

infrastructure financing legislation (S. 1961, S.Rept. 107-228).1 No further action

occurred on either bill, in large part due to controversies over provisions in both bills

to apply requirements of the Davis-Bacon Act to SRF-funded water infrastructure

projects2 and also over grant allocation formulas in the two measures.

In the 108th Congress, the House Transportation and Infrastructure

Subcommittee on Water Resources and Environment approved H.R. 1560, legislation

similar to H.R. 3930 from the 107th Congress, in July 2003. H.R. 1560 would

authorize $20 billion for the clean water SRF program for FY2004-FY2008. It

contains several provisions intended to benefit economically disadvantaged and small

communities, such as allowing extended loan repayments (30 years) and additional

subsidies, including forgiveness of the loan principal and negative interest loans, for

communities that meet a state’s affordability criteria. It includes provisions to

require communities to plan for capital replacement needs and to develop and

implement an asset management plan for the repair and maintenance of infrastructure

that is being financed. The full committee has not acted on the subcommitteeapproved bill.

On June 23, 2004, the Senate Environment and Public Works Committee

approved S. 2550. It authorizes $41.25 billion over five years for wastewater and

drinking water infrastructure programs, including $20 billion for the clean water SRF

program and $15 billion for the drinking water SRF program. The bill includes a new

formula for state-by-state allocation of clean water SRF grants, expansion of the

types of projects and activities eligible for SRF funding, and renewal of several Clean

Water Act grant programs (for sewer overflow control projects, alternative water

source pilot projects, and the National Estuary Program). It includes several

provisions to conform administrative elements of the two laws’ SRF programs (such

as amounts reserved for state administrative costs). The Senate bill directs states to

reserve a portion of their annual clean water and drinking water SRF capitalization

grants for making grants to eligible communities, and further requires EPA to

establish a small drinking water system grant program to help small water systems

1

For information, see CRS Report RL31344, Water Infrastructure Financing Legislation:

Comparison of S. 1961 and H.R. 3930.

2

The Davis-Bacon Act requires, among other things, that not less than the locally prevailing

wage be paid to workers employed, under contract, on federal construction work “to which

the United States or the District of Columbia is a party.” Critics say that it unnecessarily

increases public construction costs and hampers competition. Supporters say that the law

helps stabilize the local construction industry by preventing competition that could undercut

local wages and working conditions. Congress has added Davis-Bacon prevailing wage

provisions to more than 50 separate program statutes, including the Clean Water Act. For

background, see CRS Report RL31491, Davis-Bacon Act Coverage and the State Revolving

Fund Program Under the Clean Water Act.

CRS-3

comply with drinking water regulations.3 Among other provisions, the bill authorizes

funds to address lead contamination in schools and in the District of Columbia, and

directs the U.S. Geological Survey to assess perchlorate contamination nationwide.

S. 2550 also amends the Water Resources Planning Act to require the Water

Resources Council to conduct a special water resources study.

The House and Senate bills differ in a number of respects. In some cases, they

take different approaches to an issue, such as how to revise the formula for state-bystate allotment of CWA SRF capitalization grants. They differ in other ways as well.

S. 2550, but not H.R. 1560, includes provisions modeled on the

current SDWA that would allow private utilities to receive CWA

SRF assistance.

! Both bills would permit states to make longer-term SRF loans. H.R.

1560 generally would permit loans to be made for up to 30 years,

while S. 2550 (adopting the current SDWA approach) extends clean

water SRF loans made to disadvantaged communities from 20 years

to up to 30 years.

! The House bill addresses several issues not included in the Senate

measure. It would, for example, authorize states to use the clean

water SRF to provide technical assistance to small treatment works;

require aid recipients to conduct additional project evaluations,

including of the cost and effectiveness of innovative and alternative

processes and techniques; and reauthorize the existing Sewer

Overflow Grant program in Section 121 of the Clean Water Act.

! The Senate bill also has several provisions not contained in H.R.

1560, including a cost of service study by the National Academy of

Sciences, a nationwide demonstration program for innovations in

water quality management or water supply, and a study of lead in

drinking water by the National Academy of Sciences.

! Unlike the House bill, S. 2550 includes language that would apply

prevailing wage requirements of the Davis-Bacon Act to projects

that receive funding in whole or in part from a CWA or SDWA

SRF.

!

Future prospects for H.R. 1560 and S. 2550 are uncertain for several reasons.

First, the Administration opposes the higher SRF funding levels contained in both

bills. Second, strong disagreement exists in both houses of Congress over including

provisions to apply requirements of the Davis-Bacon Act to SRF-funded projects, as

well as over the state-by-state allotment formula in S. 2550 for Clean Water Act

capitalization grants. Similar disagreements were largely responsible for the lack of

final action on water infrastructure legislation in the 107th Congress. Third, only a

limited number of legislative days remain in the 108th Congress. Fourth, the House

3

During markup of S. 2550, the Senate Environment and Public Works Committee approved

two similar amendments to establish a small drinking water system grant program. Although

the programs contain many similarities, they would authorize grant funding at significantly

different levels. See discussion of “Small Public Water System Grant Program” in this

report.

CRS-4

Energy and Commerce Committee, which has jurisdiction over the Safe Drinking

Water Act, has not yet considered counterpart legislation to the SDWA provisions

in S. 2550.

Several other legislative proposals dealing with water infrastructure financing

programs administered by EPA, not described in this report, also have been

introduced in the 108th Congress. These include:

H.R. 688/S. 252, to authorize $15 billion in CWA SRF

appropriations and expand the types of projects eligible for CWA

SRF assistance;

! H.R. 768/S. 567, to authorize appropriations for the sewer overflow

grant program in CWA Section 221 (the House Transportation and

Infrastructure Committee approved an amended version of H.R. 768

on July 21, 2004);

! H.R. 2804, to authorize a supplemental appropriation of $85 million

for the SDWA SRF and to require that state source water assessment

programs address specified pesticides;

! H.R. 3328/S. 1432, to authorize $1.9 billion for each of FY2004FY2009 for grants to assist small communities and certain other

communities in complying with drinking water regulations;

! H.R. 3792, to authorize $25 billion in appropriations for CWA SRFs

and expand the types of eligible projects;

! H.R. 4268/S. 2377, to authorize $200 million for each of FY2005FY2009 to replace lead service lines in public water systems, and to

strengthen the regulation of lead in drinking water;

! H.R. 568/S. 827, to provide CWA assistance through grants to states

in the Chesapeake Bay watershed for installing nutrient removal

technologies at wastewater treatment plants; and

! S. 1413, to authorize appropriations for the drinking water SRF for

FY2004 at $2 billion, and to authorize feasibility studies for specific

water quality and supply projects.

!

CRS-5

Table 1. Comparison of Water Infrastructure Legislation

Current Law

S. 2550

H.R. 1560

Definitions

Clean Water Act (CWA) general

definitions are provided in §502.

No new general definitions.

CWA §212 defines “treatment works”

and other terms for Title II construction

grants program.

Defines “small treatment works” as

those serving a population of 20,000 or

fewer. (Section 307 of H.R. 1560)

Adds definition of “treatment works” to

CWA §502 (references the §212

definition). (Section 401)

Amends §212 definition of “treatment

works” to include land acquisition and

interest in lands necessary for

construction. (Section 202)

Safe Drinking Water Act (SDWA)

definitions generally are provided in

§1401.

No new general definitions.

No provision.

CWA §603(c) provides that eligible

assistance recipients include any

municipality, intermunicipal, interstate,

or state agency.

Amends §603(c) to add private utilities

that principally treat municipal

wastewater or domestic sewage as

eligible recipients for CWA State

Revolving Fund (SRF) assistance.

(Section 102 of S. 2550)

No comparable provision.

SDWA §1452(a) and (f) provide that

eligible assistance recipients include

privately or publicly owned community

water systems and nonprofit

noncommunity water systems, other

than systems owned by federal

agencies.

No additional provisions.

No provision.

Recipients Eligible for Assistance

CRS-6

Current Law

S. 2550

H.R. 1560

Modifies §603(c) to clarify that costs for

planning, design, associated

preconstruction, and necessary siting

activities are eligible for assistance.

No comparable language for costs of

planning, design, and preconstruction

activities.

Adds water conservation projects or

activities for eligibility.

Adds lake protection projects (CWA

§314), repair and replacement of

decentralized wastewater treatment

systems, municipal stormwater runoff

measures, water conservation, treatment

works security measures, watershed

development and implementation

projects (CWA §121) to list of eligible

projects. (Section 303(a))

Projects Eligible for Assistance, Types of Assistance

CWA §603(c) describes types of

projects eligible for financial assistance

(construction of publicly owned

treatment works, implementation of a

§319 nonpoint pollution management

program, and development and

implementation of a §320 estuary

conservation and management plan).

Also adds water reuse, reclamation or

recycling projects; projects to increase

facility security; and measures to control

municipal stormwater to list of types of

eligible projects, but private utilities may

not use SRF funds for such projects.

(Section 102)

CWA §603(d) defines types of

assistance that SRF may be used for,

e.g., making loans, providing loan

guarantees, buying or refinancing debt

obligations of municipalities.

Amends §603(d) to add projects for

implementation of nonpoint source

pollution management or estuarine

conservation management and allows

loans for such projects to have 30-year

amortization period. (Section 103)

No comparable provision.

SDWA §1452(a)(2) states that funds

may be used only for expenditures that

the Administrator has determined will

facilitate compliance with SDWA

regulations or significantly further

SDWA’s health protection objectives.

Expands §1452(a)(2) to allow water

systems to use funds for planning,

design, and associated preconstruction

expenditures and recovery of facility

siting costs, and for projects to replace or

rehabilitate aging water infrastructure

(including reservoirs). Funds may also

be used for capital projects to upgrade

the security of public water systems.

(Section 203)

No provision.

§1452(k) authorizes states to use up to

15% of the capitalization grant (not

more than 10% for any 1 activity) to

provide loans to public water systems

for acquiring conservation easements

or land for source water protection; to

Amends §1452(k)(2) to broaden other

eligible uses of SRF funds to include

CRS-7

Current Law

S. 2550

H.R. 1560

provide loans to community water

systems for voluntary source water

protection measures; to provide

capacity development assistance; and

to establish and implement wellhead

protection programs.

implementation of source water

protection plans.

(Section 207)

SDWA §1452(f) prescribes types of

assistance that SRF may be used for,

e.g., making loans, providing loan

guarantees, buying or refinancing debt

obligations of municipalities.

No additional provision.

No provision.

CWA — No existing provision. CWA

Title II previously authorized a federal

construction grants program for

wastewater treatment works, with a

55% federal share. Authorizations

expired in FY1990, and the Title II

grants program was replaced by the

Title VI SRF program.

Adds a new §603(k) providing that in

years when SRF appropriations do not

exceed $3 billion, states shall set aside

10% of a federal capitalization grant for

grants to eligible users for not more than

55% of the total cost of a project for

which a grant is made. State may waive

this requirement if the average time for

processing loan applications is less than

90 days. In years when SRF

appropriations exceed $3 billion, states

shall set aside not more than 10% nor

less than 5% of its SRF. (Section 107)

No comparable provision.

SDWA — No existing provision.

§1452(d) authorizes states to use up to

305 of their capitalization grant to

subsidize loans (including forgiveness

of principal) for communities that are

disadvantaged or may become

disadvantaged as a result of a proposed

project.

Adds new §1452(s) providing that in

years when SRF appropriations do not

exceed $2.5 billion, states shall set aside

10% of a capitalization grant for grants

to eligible projects for not more than

55% of the total cost of a project for

which a grant is made. State may waive

this requirement if the average time for

processing loan applications during the

SRF Grants Set-Aside Program

CRS-8

Current Law

S. 2550

H.R. 1560

preceding 12 months is less than 90

days. If an annual appropriation exceeds

$2.5 billion, states shall set aside not

more than 5% nor less than 2.5% of its

SRF. (Section 206)

Fund Management

CWA §603(c) requires that CWA SRFs

be maintained and credited with loan

repayments and be maintained in

perpetuity.

No additional provisions.

CWA §602(b)(9) requires that as part

of capitalization grant agreement, state

will use generally accepted government

accounting standards.

Requires that CWA SRFs be maintained

and credited with loan repayments and

be maintained in perpetuity. Fees shall

be used solely for administering the

fund. (Section 302(b))

Extends requirement for generally

accepted government accounting

standards to the reporting of

infrastructure assets. (Section 302(a))

No additional provisions.

No provision.

CWA §603(d) provides that a water

pollution control revolving fund may

make loans at terms not to exceed 20

years.

Adds new §603(e) to permit state to

provide an extended term for a CWA

SRF loan to a disadvantaged community

(up to 30 years, so long as that period

does not exceed the project’s design

life). (Section 104)

Modifies §603(d) to permit state to

provide an extended term for a CWA

SRF loan (up to 30 years, so long as that

period does not exceed the project’s

design life). (Section 303(b))

SDWA §1452(f) provides that a

SDWA SRF may make loans at terms

not to exceed 20 years. Exception: a

No additional provisions.

No provision.

SDWA §1452(c) requires that SDWA

SRFs be maintained and credited with

loan repayments and interest, and be

maintained in perpetuity. Amounts not

needed for current obligation or

expenditure must be invested in interest

bearing obligations.

Extension of Loans

CRS-9

Current Law

S. 2550

H.R. 1560

Adds new §603(e) authorizing states to

provide additional subsidization,

including forgiveness of principal, for

projects in disadvantaged communities

or communities expected to become

disadvantaged.

Adds new §603(i) authorizing states to

provide additional subsidization from a

CWA SRF, including forgiveness of

principal and negative interest loans, to

projects to benefit a municipality that

meets the state’s affordability criteria.

Also may provide subsidization to

implement alternative processes or

techniques that may result in cost

savings or increased environmental

benefits.

Additional subsidization under this

provision may not exceed 30% of the

state’s capitalization grant in that year.

(Section 104(a))

Total amount of subsidization provided

by a state may not exceed 30% of its

capitalization grant.

state may extend the term of a loan to

as much as 30 years for disadvantaged

communities, provided the term does

not exceed the project’s design life.

Additional Subsidization

CWA §603(d) permits states to make

loans at or below market interest rates,

including interest-free loans. CWA

has no existing provisions for

additional subsidization or forgiveness

of loans.

State also may provide additional

subsidization to municipalities that do

not meet affordability criteria if the

municipality seeks to benefit individual

ratepayers in the residential user rate

class and ensures that this subsidization

will be directed through a user charge

rate system to such ratepayers.

New §603(e) defines “disadvantaged

community” to mean the service area, or

portion of a service area, of a treatment

works that meets affordability criteria

established by the state. (Section 104(a))

Directs states to establish affordability

criteria by Sept. 30, 2004. EPA may

provide information to assist states in

establishing criteria. (Section 303(f))

CRS-10

Current Law

S. 2550

H.R. 1560

No set-aside provision.

Set-aside: In any year when CWA SRF

appropriations exceed $1.4 billion, a

state shall set aside 25% of the

difference between its capitalization

grant and its proportionate share of $1.4

billion to provide additional

subsidization for projects that meet

affordability criteria. (Section 303(f))

SDWA §1452(d) authorizes states to

provide additional loan subsidization,

including forgiveness of principal, for

projects in disadvantaged communities.

The total amount of loan subsidies may

not exceed 30% of the state’s

capitalization grant for that year.

No additional provisions.

No provision.

§1452(d)(3) defines ‘disadvantaged

community’ as the service area of a

system that meets affordability criteria

set by the state. EPA may publish

information to assist states in

establishing these criteria.

Amends definition of ‘disadvantaged

community’ in §1452(d)(3) to include

the service area, or portion of a service

area, of a water system that meets

affordability criteria.

(Section 204)

No provision.

Financial Assistance to Small Systems from the SRF

CWA — No existing provision.

No provision.

Directs states, beginning in FY2005, to

use at least 15% of CWA capitalization

grants to assist municipalities with

population less than 20,000, if there are

sufficient applications for assistance.

(Section 122(c))

SDWA §1452(a)(2) requires that 15%

of the amount credited to a state

SDWA SRF in any fiscal year must be

available for providing loan assistance

to systems serving fewer than 10,000

No additional provision. (For related

provisions see SRF grants set-aside

program and small public water system

grant program)

No provision.

CRS-11

Current Law

S. 2550

H.R. 1560

persons, to the extent such funds can be

obligated for eligible projects.

Technical Assistance to Small Systems from the SRF

CWA — No existing provision.

No provision.

Authorizes states to provide CWA SRF

assistance to small treatment works for

technical and planning assistance and

assistance with financial management,

user fee analysis, capital improvement

planning, facility operation and

maintenance, repair schedules to

improve treatment plant management

and operations. Amounts shall not

exceed 2% of capitalization grant

awards to the fund. (Section 303(e))

SDWA §1452(g)(2) authorizes states to

use 2% of their SRF grant to provide

technical assistance to water systems

serving 10,000 or fewer persons.

No additional provision.

No provision.

SDWA §1452(q) authorizes EPA to

reserve up to 2% of the SRF

appropriation to provide technical

assistance to small systems (not to

exceed the amount authorized under

§1442(e) (regarding small systems

technical assistance).

Technical Assistance Grants for Rural and Small Treatment Works

CWA — No existing provision, but

§104(b) generally authorizes EPA to

support or conduct various types of

research, investigations, and training.

Adds new Section 222 to authorize EPA

to make grants to qualified nonprofit

providers for technical assistance to

treatment works located in rural areas

and serving fewer than 10,000 users in

planning, developing, and obtaining

Similar provision. Modifies CWA

§104(b) to authorize EPA to make

grants to nonprofit organizations

concerning assistance to rural and small

municipalities, publicly owned

treatment works and decentralized

CRS-12

Current Law

SDWA §1442(e) authorizes EPA to

provide technical assistance to small

systems through circuit-rider and

regional technical assistance programs.

Assistance may go to nonprofit

organizations. Authorizes $15 million

for each of FY1997-FY2003.

S. 2550

H.R. 1560

financing for eligible projects.

Authorizes grants to nonprofits to

capitalize revolving loan funds for

predevelopment costs of wastewater

projects or certain equipment

replacement costs. Loans to small

systems may not exceed $100,000 and

the loan term may not exceed 10 years.

Defines “qualified nonprofit technical

assistance provider.” To the maximum

extent possible, all states should get a

grant under this provision. Requires

grantees to consult with states, to submit

annual reports. Authorizes $25 million

per year for FY2005-2009. (Section 101)

wastewater treatment systems

concerning planning, design, financing,

construction and operation of

wastewater treatment works.

Authorizes grants to nonprofits to

capitalize revolving loan funds for

predevelopment costs of wastewater

projects or certain equipment

replacement costs. Authorizes not to

exceed $75 million per year for

FY2004-2008. Grants to nonprofits

shall be awarded competitively to the

extent practicable. (Section 101)

Amends §1442(e) to authorize EPA to

make grants to private, nonprofit entities

to capitalize revolving funds to provide

financing to systems serving 10,000 or

fewer persons for predevelopment costs,

short-term costs incurred for

replacement equipment, and small

capital projects. Loans to small systems

may not exceed $100,000 and the loan

term may not exceed 10 years. Grant

recipients must submit annual activity

reports to EPA Authorizes $25 million

for each of FY2005-FY2009 for this

program. (Section 208)

No provision.

Increases allowed CWA reservation for

administrative costs to 6%. (Section 108)

Increases allowed reservation for

administrative costs to $400,000, or 1/5

percent per year of the current valuation

of the state’s SRF, whichever is greater.

(Section 303(d))

State Administrative Costs Set-Aside

CWA §603(d) allows a state to reserve

up to 4% of a federal capitalization

grant to cover the reasonable costs of

administering the SRF.

CRS-13

Current Law

S. 2550

SDWA §1452(g)(2) allows a state to

use up to 4% of a federal capitalization

grant to cover the reasonable costs of

administering programs under §1452

and to provide technical assistance to

public water systems.

Increases allowed SDWA reservation for

administrative costs to 6%. (Section

205(a))

§1452(g)(2) also authorizes states to

use up to another 10% of a federal

capitalization grant to administer public

water system supervision programs, to

administer or provide technical

assistance through source water

protection programs, to develop and

implement capacity development

strategies, and for operator certification

programs. For these purposes, states

must provide a dollar-for-dollar match

of funds.

Repeals requirement that states match

funds reserved for these purposes.

(Section 205(a))

H.R. 1560

No provision.

Reservation of Funds for Planning

CWA §604(b) directs states to reserve

1% of sums allotted under Title VI, or

$100,000, whichever is greater, to carry

out specified planning activities.

Increases reservation of funds for

planning to 2% of allotted sums or

$100,000. (Section 109(3))

Increases reservation of funds for

planning to 2% of allotted sums, or

$100,000, whichever is greater. (Section

304(b))

SDWA — No provision.

No provision.

No provision.

Cross-Cutting Requirements; Labor Standards

CWA §602(b)(6) attaches 16 specific

statutory requirements to projects

funded with a capitalization grant (but

not to SRF activity made from loan

repayments or other state monies). All

but two are CWA-specific carryover

(“equivalency”) requirements from the

previous CWA Title II construction

Davis-Bacon prevailing wage

requirements (CWA §513) shall apply to

projects that receive funding, in whole or

in part, from a state water pollution

control revolving fund. (Section 102)

Treatment works constructed in whole

or in part with funds directly made

available by Title VI capitalization

grants and CWA §205(m) shall comply

with the following CWA provisions:

implementing a user charge system and

having adequate legal and financial

capability to construct, operate and

CRS-14

Current Law

S. 2550

maintain the treatment works (CWA

§204(b)(1)); restrictions on funding

sewer collector systems (CWA §211);

cost-effectiveness and value

engineering review (CWA §218); and

applicability of NEPA (CWA §511(c))

(Section 302(b)) (Does not extend

Davis-Bacon requirements.)

grant program. Other cross-cutting

federal requirements are: applicability

of the National Environmental Policy

Act and Davis-Bacon prevailing wage

provisions for treatment works

construction. The requirements applied

to funds provided through FY1994.

SDWA SRF provisions (§1452) do not

specify federal cross-cutting

requirements, but, as with CWA

assistance, a number of federal laws,

executive orders, and government-wide

policies apply by their own terms to

projects and activities receiving federal

financial assistance, regardless of

whether a statute authorizing assistance

specifies that they apply. Several apply

only to the state as a grant recipient.

All projects for which the state

provides SDWA SRF assistance in

amounts up to the amount of the

capitalization grant must comply with

cross-cutting laws and requirements;

amounts greater than this are not

subject to cross-cutting requirements.

§1450(e) directs EPA to take such

action as may be needed to assure

compliance with the Davis-Bacon Act.

H.R. 1560

Revises SDWA §1450(e) to expressly

apply Davis-Bacon to all construction

projects financed in whole or in part, and

by any form of assistance provided

under SDWA (including assistance

provided from state drinking water

SRFs). (Section 202)

No provision.

No additional provision.

Amends §602(b) to add a requirement

that, beginning in FY2005, states shall

require as a condition of receiving

CWA SRF assistance that recipients

evaluate the cost and effectiveness of

Requirements for Receipt of Funds

CWA §602(b) specifies a number of

conditions for receipt of SRF

assistance. (See discussion above on

cross-cutting requirements.)

CRS-15

Current Law

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innovative and alternative processes and

techniques and select projects

accordingly; and consider the cost and

effectiveness of alternative management

and financing approaches (including

rate structures, consolidation, publicprivate partnerships). Requires use of a

qualification-based selection method in

the awarding of contracts and

subcontracts for funds directly made

available from Title VI capitalization

grants. (Section 302(b))

Adds new §603(d)(1)(E) to require that

recipient of loan assistance develop and

implement a fiscal sustainability plan

that includes an inventory and

evaluation of critical assets of the

portion of the treatment works and plan

for maintenance and repair of the

portion of the facility funded by the

SRF. (Section 303(c))

SDWA §1452, like the CWA

provisions, imposes various

requirements on recipients of SRF

assistance. §1452(f) further requires

that a loan recipient establish a

dedicated source of revenue (or for

privately owned system, demonstrate

adequate security) to repay loan.

No additional provision.

No provision.

Adds new §603(h) to update the priority

list requirement. Requires each state to

establish a system for providing

financial assistance from the SRF. In it,

Revises §603(g) to update the CWA

priority list requirement. Requires

states to establish or update a list of

projects and activities for which SRF

Priority System Requirement

CWA §216 authorizes states to

determine the priority of specific

projects to be funded. Identifies

categories of eligible treatment works

CRS-16

Current Law

projects that states may include on

priority list.

SDWA §1452(b)(3) requires states to

develop Intended Use Plans for SRF

funds, giving priority to using funds for

projects that: address the most serious

risks; are needed to ensure compliance,

and assist systems most in need on a

per household basis. Requires states to

publish periodically their list of

projects eligible for assistance.

S. 2550

H.R. 1560

state shall give more weight to

applications that include inventory of

assets, financing plan, review of options

for restructuring the treatment works,

review of options other than traditional

wastewater approach for the facility, and

other appropriate information. Defines

“restructuring” and “traditional

approach.” State shall biennially publish

a summary of projects eligible for

assistance (i.e., treatment works and

other projects), including a project’s

priority and anticipated funding

schedule. (Section 105)

assistance is sought, using a listing

methodology each state shall establish.

The list may include categories of

nonpoint source activities. States shall

seek to achieve the greatest degree of

water quality improvement and consider

whether improvements would be

realized without SRF assistance.

(Section 305(a))

Expands §1452(b)(3) to direct states to

give more weight to applications by

community water systems that include

an inventory of assets, a schedule for

asset replacement, a financing plan, a

review of options for restructuring the

water system, a review of options other

than traditional approach, and other

information the state may require.

Defines “restructuring” and “traditional

approach.” Requires states to publish at

least biennially a list of projects eligible

for assistance. (Section 205(b))

No provision.

Revises CWA allotment for SRF

capitalization grants for FY2005-2009

Moves towards a target allotment based

on needs (meaning, allotment in

accordance with each state’s

proportional share of total needs) and no

state receiving less than 1.0% of total

Current CWA allotment formula shall

apply to SRF capitalization grant

distribution in FY2003 and FY2004.

Beginning in FY2005, appropriated

amounts up to $1.35 billion shall be

allotted under the current allotment

formula. Amounts that exceed $1.35

If the state does not fund projects and

activities in the order on the priority list,

it must provide an explanation of the

change. (Section 305(b))

Allotment

CWA §205(c)(3) provides a state-bystate formula for annual allotment of

available funds. This formula, in effect

since 1987, combines population and

need factors. No state currently

receives less than 0.4971% of available

funds (except for territories, which

CRS-17

Current Law

generally receive smaller shares).

S. 2550

H.R. 1560

funds. Includes complex factors to

moderate potential for substantial loss or

gain of funds under the target, compared

with current allotment formula. The

result, in general, is that small states

would receive somewhat larger

percentages under the revised formula

than under the current formula, while, in

general, most (but not all) of the states

with large needs would have the same

percentage allotment under the revised

formula as under current law. Also

includes language that would adjust the

states’ percentage allotments if the

appropriated amounts were to increase

above current $1.35 billion annual

appropriations. At higher appropriated

levels (above $3.15 billion), adjustments

would enable the small states to reach

the 1% target minimum, while dollar

amounts received by the larger states

would still be larger than amounts that

they receive today under the current

allotment.

billion shall be allotted according to a

needs-based formula to be developed by

EPA; no minimum state share specified.

(Section 304(a))

EPA is directed to publish an allotment

formula based on water quality needs by

Sept. 30, 2004. (Section 304(c))

Allocates a total of 0.25% of available

funds among Guam, Virgin Islands,

American Samoa, Commonwealth of

Northern Mariana Islands, Micronesia,

Marshall Islands, Palau to be allotted by

EPA. (Section 109)

SDWA §1452(a)(D) requires that funds

are allotted to the states based on a

formula that reflects the proportional

share of each state’s needs identified in

the most recent needs survey

No additional provisions.

No provision.

CRS-18

Current Law

S. 2550

H.R. 1560

CWA §607 authorizes $8.4 billion in

capitalization grants for state revolving

funds for FY1989-94. (Congress has

continued to appropriate SRF

capitalization grants since FY1994.

Appropriations for the last five years

have been $1.35 billion per year.)

Authorizes CWA SRF capitalization

grants as follows: $3.2 billion in each of

FY2005 and FY2006, $3.6 billion in

FY2007, $4 billion in FY2008; and $6

billion in FY2009, totaling $20 billion.

Reserves $1 million per year for EPA to

pay the costs of conducting needs

surveys. (Section 110)

Authorizes CWA SRF capitalization

grants as follows: $2 billion in FY2004,

$3 billion in FY2005, $4 billion in

FY2006, $5 billion in FY2007, and $6

billion in FY2008, totaling $20 billion.

(Section 308)

SDWA §1452(m) authorizes SRF

capitalization grants: $599 million for

FY1994, and $1 billion for each of

FY1995-FY2003, totaling $9.59

billion.

Authorizes SDWA SRF capitalization

grants as follows: $1.5 billion in

FY2005; $2 billion in each of FY2006

and FY2007; $3.5 billion in FY2008;

and $6 billion in FY2009, totaling $15

billion. Reserves $1 million per year to

pay the costs of conducting needs

surveys. (Section 209)

No provision.

(conducted every four years). The

minimum share for each state and

District of Columbia is 1% of available

funds; territories receive up to 0.33%.

SRF Authorization

Cross-Collateralization between CWA and SDWA SRFs

CWA — No existing provision, but

FY1998 and FY1999 EPA

appropriation laws allow states to

combine assets of CWA and SDWA

SRFs as security for bond issues to

enhance the lending capacity of one or

both SRFs.

Adds new §603(j) to permit a state to

transfer up to 33% of a CWA

capitalization grant to its SDWA SRF

and vice versa. (Section 106)

No comparable provision.

§302 of the SDWA Amendments of

1996 (P.L. 104-182) authorized a state,

prior to FY2002, to transfer as much as

33% of the SDWA SRF capitalization

Incorporates this authority into SDWA

under new §1452(g)(5).

(Section 205(a))

No provision.

CRS-19

Current Law

S. 2550

H.R. 1560

CWA §518 authorizes the EPA

Administrator to reserve 0.5% of funds

appropriated under §207 for developing

waste treatment management plans and

construction of sewage treatment works

to serve Indian tribes. Appropriations

laws since FY2001 have reserved 1.5%

of CWA SRF appropriated funds for

Indian tribes.

Increases CWA funds reserved for

Indian Tribes to 1.5% of funds available

under Title VI. (Section 108)

Increases CWA funds reserved for

Indian Tribes to not less than 0.5% or

more than 1.5% of funds available

under §207. Funds are to be used for

projects to assist Indian tribes, former

Indian reservations in Oklahoma, and

Alaska Native villages. (Section 402)

SDWA §1452(i) authorizes EPA to

reserve 1.5% of the SRF appropriation

for grants to Indian Tribes and Alaska

Native villages.

No additional provisions.

No provision.

grant to the CWA SRF or an equivalent

amount from the CWA SRF to the

SDWA SRF.

SRF Set-Aside for Indian Programs

SRF Review Process — Assistance for Accessing the SRF

Directs the EPA Administrator to

identify ways to streamline and improve

the application and review process for

CWA SRF and SDWA SRF assistance

and to submit a report to Congress.

(Section 304)

Adds new §607 that directs EPA to

assist states in establishing simplified

procedures for treatment works to

obtain CWA SRF assistance and shall

publish a manual to assist systems in

obtaining assistance. (Section 307)

CWA §516(b)(1) directs EPA to

conduct a survey of needed publicly

owned treatment works every two

years.

Modifies needs survey to every four

years. (Section 111)

No comparable provision.

SDWA §1452(h) directs EPA to

conduct a survey of water system

No additional provisions.

No provision.

CWA — No existing provision.

SDWA — No existing provision.

Reports: Needs Surveys

CRS-20

Current Law

S. 2550

H.R. 1560

Inserts new §1464(d) requiring the

Administrator to establish a program to

provide grants to states to assist in

paying, or to provide reimbursement for,

the costs incurred by local educational

agencies in testing for, remediating , and

informing students, parents, teachers,

and employees about lead contamination

in drinking water at schools within their

jurisdiction.

No comparable provision, but see H.R.

4268.

capital improvement needs survey and

report to Congress every four years. On

the same schedule, §1452(i) directs

EPA to conduct needs surveys of

drinking water facilities to serve Indian

Tribes.

Removal of Lead from Drinking Water in Schools

SDWA §1464(d) directs states to

establish programs to assist local

educational agencies to test for and

remedy lead contamination in drinking

water at schools, and requires schools

to make test results available and to

notify parents, teachers and others of

the availability of test results.

(In 1996, the U.S. Court of Appeals for

the Fifth Circuit ruled that the

requirements in §1464(d) that states

establish programs violate the 10th

Amendment and are unconstitutional.

ACORN v. Edwards, 81 F .3d 1387 (5th

Cir. 1996).)

§1465(a) directs EPA to make grants to

states to carry out §1464 and §1465(b)

requires states to use grants to test for,

and remediate, lead contamination in

school drinking water.

§1465(a) authorizes EPA to use up to

5% to pay administrative expenses.

New §1464(d) authorizes EPA to use up

to 5% to pay administrative expenses.

§1465(c) authorized $30 million for

each of FY1989-FY1991 for grants to

states.

New §1464(d) authorizes $40 million for

each of FY2005-FY2008;

(Section 210(a))

CRS-21

Current Law

S. 2550

H.R. 1560

Lead Contamination in Drinking Water in the District of Columbia

SDWA — §1465(a) directs the

Administrator to make grants to states

to carry out §1464 (see above).

New §1465(a) authorizes the

Administrator to provide a $20 million

grant to the District of Columbia to

address lead contamination in the local

water supply. Funds may be used to

assess infrastructure, test water supplies

distribute filters, evaluate chemical

additive, replace pipes, and evaluate and

improve public communication.

Authorizes to be appropriated to carry

out this section $20 million.

§1465(b) requires that grants be used

by states to test for, and remediate, lead

contamination in school drinking water.

Authorized EPA to use up to 5% to pay

administrative expenses.

New §1465(b) directs the Administrator

to contract with the National Academy

of Sciences (NAS) to conduct a study

that (1) evaluates compliance by the

District of Columbia Water and Sewer

Authority with lead in drinking waster

regulations, and the potential causes of

lead in the local water supply; and (2)

assess, from a cross-section of cities

with lead service lines, the extent to

which those cities exceeded the lead

action level, and the potential causes of

the exceedences. Not later than one year

after enactment, the NAS must submit a

report to the House Energy and

Commerce Committee and the Senate

Environment and Public Works

Committee. Authorizes $2 million for

the study. (Section 210(b))

No comparable provision.

CRS-22

Current Law

S. 2550

H.R. 1560

Small Public Water System Grant Program

(Sections 211 and 212 of S. 2550 each

add new SDWA Part G and contain

nearly identical provisions)

Amends SDWA to establish within EPA

a small public water system assistance

program for eligible entities within states

and areas governed by Indian Tribes.

(Section 211 and Section 212)

No comparable provision.

2. Definitions

New SDWA §1471 defines for Part G:

“eligible activity” to mean an activity

needed to ensure compliance with

drinking water regulations, including

source water protection and excluding

any activity to increase the population

served by a system (unless needed for

compliance or to serve a population not

served by a safe public water system);

“eligible entity” means a small public

water system that, based on affordability

criteria, serves a disadvantaged

community or a community that would

otherwise become disadvantaged as a

result of carrying out an eligible activity,

and a system that would incur more than

$3 million in costs in complying with

regulations and is, or would become, a

disadvantaged community; “small public

water system” includes community and

non-community water systems that serve

populations of 15,000 or fewer persons.

(Section 211 and Section 212)

No comparable provision.

3. Program establishment

§1472(a) directs EPA to establish a

small system grant program by July 1,

2006. (Section 211 and Section 212)

No comparable provision.

1. Establishment of Small System Grant

Program

CWA — Not applicable.

SDWA — No provision.

CRS-23

Current Law

S. 2550

H.R. 1560

4. Program priorities

§1472(b) directs EPA to provide grants

to eligible systems for activities that:

address the most serious health risk from

lack of compliance; are needed to ensure

compliance; and assist communities

most in need, based on median

household income, under affordability

criteria established by the state (or EPA

for entities in Tribal areas). EPA must

also consider giving priority to activities

carried out by communities that form

management cooperatives.

For entities in Tribal areas, §1472(e)(2)

requires EPA and the Indian Health

Service to develop an annual list of

eligible activities based on the above

priorities. (Section 211 and Section 212)

No comparable provision.

5. Technical assistance

§1472(d) requires EPA to use at least

1.5% of the available funds to provide

grants to nonprofit technical assistance

organizations to be used to assist eligible

entities in: assessing needs; identifying

additional funding sources to meet costsharing requirements; and planning,

implementing and maintaining activities

that receive funding. Entities may use no

more than 5% of their grant for such

technical assistance; §1472(e)(4)

imposes a similar 5% limit for entities

governed by Indian Tribes.

(Section 211 and Section 212)

No comparable provision.

6. Grants for Indian Tribes

§1472(e) Requires EPA to use at least

3% of funds available each year to

provide grants to eligible entities located

in areas governed by Indian Tribes.

(Section 211 and Section 212)

No comparable provision.

CRS-24

Current Law

7. Limitations on receipt of funds

S. 2550

(Sections 211 and 212 of S. 2550

contain different provisions.)

As provided in Section 211:

§1472(f) provides that eligible entities

may receive grants only: 1) if EPA

determines that the grant will aid

compliance; 2) to restructure or

consolidate to achieve compliance; or if

restructuring is not feasible, EPA

determines that the entity has made a

good faith effort to comply and is

adhering to an enforceable compliance

schedule; and 3) if EPA determines that

an entity lacks the technical, managerial,

operations, maintenance, or financial

capacity to ensure compliance, and the

entity agrees to make changes in

operations, and EPA determines that the

measures are needed to ensure

compliance capacity over the long term.

As provided in Section 212:

§1472(f) generally provides that grant

may not be provided to entities that lack

the technical, managerial, operations,

maintenance, or financial capacity to

ensure compliance, or are in significant

noncompliance with a drinking water

regulation. The exception to this

prohibition allows such entities to

receive a grant if the conditions above

are met. Before providing assistance to

an entity that is in significant

noncompliance, EPA must assess

whether the entity has the capacity to

comply with SDWA regulations.

H.R. 1560

No comparable provision.

CRS-25

Current Law

S. 2550

H.R. 1560

8. Cost share

§1472(g) provides that the share of the

total cost of an activity funded by a grant

generally may not exceed 80%; EPA

may waive this requirement, partially or

completely, as needed.

(Section 211 and Section 212)

No comparable provision.

9. Reports

§1473 requires EPA to report annually,

for FY2006-2010, to the Senate

Committee on Environment and Public

Works and the House Committee on

Energy and Commerce. The reports must

list the activities receiving funds,

identify the number and amounts of

grants awarded and the grant recipients.

(Section 211 and Section 212)

No comparable provision.

10. Authorization of Appropriations

(Sections 211 and 212 of S. 2550

contain different provisions.)

§1474 authorizes for this program $200

million for each of FY2005-FY2009.

(Section 211)

No comparable provision.

§1474 authorizes for this program $1

billion for each of FY2008-2011.

(Section 212)

Pilot Program for Alternative Water Source Projects

CWA §220 authorizes EPA to establish

a pilot program of grants for alternative

water source projects to meet critical

water supply needs. Authorizes

appropriations of $75 million annually

for FY2002-2004.

Extends authorization at $25 million per

year for FY2005-2007. (Section 112)

Extends authorization without other

modification through FY2008. (Section

204)

CRS-26

Current Law

S. 2550

H.R. 1560

Revises §221, adding stormwater runoff

projects. Authorizes to be appropriated

$250 million per year for FY2005-2009.

(Section 113)

Authorizes $250 million per year for

sewer overflow grants for FY2005-2008

and such sums as necessary for FY2004.

Specifies allocation criteria for FY2004

(same as for FY2002 in current

provision) and FY2005 and beyond

(based on each state’s proportional need

for overflow control projects). Funded

projects shall generally conform to

requirements applicable to SRF-funded

projects. (Section 205) (Also see H.R.

784, similar legislation approved by

House Transportation and Infrastructure

Committee July 21, 2004.)

Makes a technical correction to

redesignate this provision as CWA §122.

(Section 114)

Reauthorizes existing grants program at

$20 million per year for FY2004-2008.

Grants may be used for watershed

partnerships to address nonpoint sources

of pollution to reduce adverse impacts

on water quality. Changes reporting

requirement from five years after

enactment to seven years. Makes a

technical correction to redesignate this

provision as CWA §122. (Section 103)

Reauthorizes grants at $35 million per

year (no change) for FY2006-FY2010.

(Section 307)

No comparable provision, but see H.R.

4731, similar legislation approved by

House Transportation and Infrastructure

Committee July 21, 2004.

Sewer Overflow Grants

CWA §221 authorizes $750 million

annually in FY2002-2003 for grants for

municipal combined sewer overflow

and sanitary sewer overflow projects.

Financially distressed communities are

to have priority. Grants are only

available in years in which Title VI

(SRF) funds are at least $1.35 billion.

Watershed Pilot Projects

CWA §121, Wet Weather Watershed

Pilot Projects, authorized $45 million

for FY2002-2004 for technical

assistance and grants to municipalities

for pilot projects to manage wet

weather discharges and to demonstrate

stormwater management technologies.

(When enacted in P.L. 106-554, this

provision was one of two that were

designated as §121.)

National Estuary Program

CWA §320 authorizes the National

Estuary Program. Governors may

nominate estuaries and request a

management conference to develop a

comprehensive conservation and

management plan (CCMP) for the

CRS-27

Current Law

S. 2550

H.R. 1560

estuary. Authorizes grants for

development and implementation of

CCMPs.

Sewage Control Technology Grant Program

CWA — No existing provision.

Adds new §701 to the CWA. Directs

EPA to establish a competitive program

of grants to states and municipalities to

upgrade nutrient removal technologies of

wastewater treatment works with

permitted design capacity to treat

500,000 gallons or more of wastewater

per day and are located in the

Chesapeake Bay watershed. Federal

share of project costs shall not exceed

55%. Authorizes $100 million annually

for FY2005-2009. (Section 308) (Also

see S. 827/H.R. 568, similar legislation.)

No comparable provision.

Demonstration Program for Water Quality Enhancement and Management

CWA — No existing provision.

SDWA — No existing provision.

Directs EPA to establish a nationwide

demonstration program of 10 projects

per year to promote innovations in

technology and alternative approaches to

water quality management or water

supply and reduce municipalities’ costs

to comply with the CWA and SDWA.

Specifies criteria for selection of

municipalities to carry out projects and

types of projects relating to excessive

nutrient growth, lack of alternative water

supply, nonpoint source pollution, sewer

overflows, problems with naturally

occurring constituents, or new

approaches to water treatment,

distribution and collection systems, and

No comparable provision.

CRS-28

Current Law

S. 2550

H.R. 1560

others. Municipalities applying for

grants shall submit a plan that meet

specified criteria. Non-federal share of

project costs shall be at least 20%.

Authorizes $20 million per year for

FY2005-2009.

Also directs EPA to carry out a grant

program for research and development

on innovative and alternative

technologies for water quality or

drinking water supply; authorizes $20

million per year for FY2005-2009.

(Section 302)

Southeast Colorado Safe Drinking Water Supply

Directs the EPA Administrator to make a

grant to the Southeast Colorado Water

Activity Enterprise to construct a water

transmission line from the Pueblo

Reservoir to the city of Lamar, CO.

Authorizes for this purpose $85 million

for the period of FY2005-FY2010.

(Section 305)

No provision.

CWA — No existing provision.

No provision.

No provision.

SDWA §1420(g) requires EPA to

provide initial funding for universitybased environmental finance centers to

provide technical assistance to state

and local officials in developing the

financial and managerial capacity of

public water systems. Directs EPA to

establish a national public water system

Authorizes $2 million for each of

FY2005-FY2009 to implement this

program.

(Section 201)

No provision.

SDWA — No existing provision.

Environmental Finance Centers

CRS-29

Current Law

S. 2550

H.R. 1560

capacity development clearinghouse.

Authorizes $1.5 million for each of

FY1997-FY2003 for this program.

Miscellaneous

No additional provision.

Authorizes $250 million per year for

FY2003-2008 for CWA §106. (Section

102)

SDWA §1443 authorizes $100 million

for each of FY1997-FY2003 for grants

to states to administer public water

system supervision programs.

No additional provision.

No provision.

2. Annual report and federal oversight

No additional provision.

Requires that the annual report include

identification of the eligible purpose for

which SRF assistance was provided.

(Section 306(a))

1. State management assistance

CWA §106 authorizes grants to states

to assist management of state water

pollution control programs.

CWA §606(d) requires states to

provide an annual report on achieving

the goals and objectives of its Intended

Use Plan.

CWA §606(e) requires EPA to conduct

annual oversight review of a state’s

Intended Use Plan.

SDWA §1452(g) requires states to

submit a report every two years to EPA

on its SRF activities and related audits;

requires EPA to periodically audit all

state loan funds.

SDWA §1452(r) directs EPA to assess

the effectiveness of SRFs through

FY2001 and report to Congress.

Authorizes EPA to allow a state to

certify its compliance with CWA Title

VI for purposes of this review. (Section

306(b))

No additional provision.

No provision.

CRS-30

Current Law

3. Sewage collection systems

S. 2550

No additional provision.

Amends §211. Updates limits on sewer

collector systems to those in systems or

communities in existence as of Jan. 1,

2003. Projects are to address adverse

environmental conditions existing on

the date of enactment of this provision.

(Section 201)

No provision.

Modifies §218 to delete specification of

devices and systems selected for an

overall treatment system. (Section 203)

No provision.

Nothing in this act may be construed as

providing EPA with authority to issue

regulations. (Section 403)

Directs the National Academy of

Sciences to prepare a study of the means

by which public water systems and

treatment works meet costs associated

with operation, maintenance, capital

replacement, and regulatory

requirements. The study shall address

issues including affordability and

identification and characterization of

disadvantaged communities. The study

shall be completed within two years.

(Section 303)

No comparable provision.

CWA §211 limits Title II assistance for

replacement or major rehabilitation of

existing sewage collection systems or

for new collector systems in an existing

community.

4. Cost-effectiveness

CWA §218 expresses the policy of

Congress regarding financial assistance

for waste treatment and management

systems that are the most economical

and cost-effective combination of

treatment works to meet requirements

of the act, including water conservation

measures.

5. Regulatory authority not provided

H.R. 1560

CWA — No existing provision.

SDWA — No existing provision.

Cost of Service Study

CWA — No existing provision.

SDWA — No existing provision.

CRS-31

Current Law

S. 2550

H.R. 1560

Assessment of Perchlorate Contamination

CWA — No existing provision.

SDWA — No existing provision.

Requires the U.S. Geological Survey, no

later than one year after enactment, to

conduct a nationwide assessment of sites

contaminated with perchlorate and the

geological conditions at those sites, and

to report the results to Congress.

(Section 306)

No comparable provision.

Amends §101 of the Water Resources

Planning Act to add the Secretary of

Homeland Security to the Water

Resources Council. Directs the Council

to carry out a Special Water Resources

Study to project future water supply and

demand, to develop recommendations

for a comprehensive water strategy, to

evaluate federal water programs and

submit recommendations to eliminate

discrepancies and duplication among

programs, and develop and make

available water planning models to

reduce water resource conflicts. Calls

for interim reports and a final report not

later than three years after the first

meeting of the Council following

enactment. Authorizes $9 million for

FY2005 to carry out this study. (Section

309)

No comparable provision.

Special Water Resources Study

Water Resources Planning Act of 1965

established a Cabinet-level Water

Resources Council and also established

River Basin Commissions. The

Council was empowered to maintain a

continuing assessment of the adequacy

of water supplies in each region of the

U.S. In addition, the Council was

mandated to establish principles and

standards for federal participants in the

preparation of river basin plans and in

evaluating federal water projects.

Authorization for the Council still

exists (42 U.S.C. §1962a), but

President Reagan disbanded the

Council in 1983, and there have been

no appropriations since then.

CWA — No existing provision.

SDWA — No existing provision.

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