To amend the Federal Water Pollution Control Act and the Safe Drinking Water Act to improve water and wastewater infrastructure in the United States.

July 14, 2005

Mr. CHAFEE (for himself, Mrs. CLINTON, Mr. INHOFE, and Mr. JEFFORDS) introduced the following bill; which was read twice and referred to the Committee on Environment and Public Works

To amend the Federal Water Pollution Control Act and the Safe Drinking Water Act to improve water and wastewater infrastructure in the United States.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the `Water Infrastructure Financing Act'.

(b) Table of Contents- The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I--WATER POLLUTION INFRASTRUCTURE

Sec. 101. Technical assistance for rural and small treatment works.

Sec. 102. Projects eligible for assistance.

Sec. 103. Water pollution control revolving loan funds.

Sec. 104. Affordability.

Sec. 105. Transferability of funds.

Sec. 106. Costs of administering water pollution control revolving loan funds.

Sec. 107. Water pollution control revolving loan funds.

Sec. 108. Noncompliance.

Sec. 109. Authorization of appropriations.

Sec. 110. Critical water infrastructure projects.

TITLE II--SAFE DRINKING WATER INFRASTRUCTURE

Sec. 201. Preconstruction work.

Sec. 202. Affordability.

Sec. 203. Safe drinking water revolving loan funds.

Sec. 204. Other authorized activities.

Sec. 205. Priority system requirements.

Sec. 206. Authorization of appropriations.

Sec. 207. Critical drinking water infrastructure projects.

Sec. 208. Small system revolving loan funds.

Sec. 209. Study on lead contamination in drinking water.

Sec. 210. District of Columbia lead service line replacement.

TITLE III--MISCELLANEOUS

Sec. 301. Definitions.

Sec. 302. Demonstration grant program for water quality enhancement and management.

Sec. 303. Agricultural pollution control technology grant program.

Sec. 304. State revolving fund review process.

Sec. 305. Cost of service study.

Sec. 306. Water resources study.

TITLE I--WATER POLLUTION INFRASTRUCTURE

SEC. 101. TECHNICAL ASSISTANCE FOR RURAL AND SMALL TREATMENT WORKS.

(a) In General- Title II of the Federal Water Pollution Control Act (33 U.S.C. 1281 et seq.) is amended by adding at the end the following:

`SEC. 222. TECHNICAL ASSISTANCE FOR RURAL AND SMALL TREATMENT WORKS.

`(a) Definition of Qualified Nonprofit Technical Assistance Provider- In this section, the term `qualified nonprofit technical assistance provider' means a qualified nonprofit technical assistance provider of water and wastewater services to small rural communities that provide technical assistance to treatment works (including circuit rider programs and training and preliminary engineering evaluations) that--

`(1) serve not more than 10,000 users; and

`(2) may include a State agency.

`(b) Grant Program-

`(1) IN GENERAL- The Administrator may make grants to qualified nonprofit technical assistance providers that are qualified to provide assistance on a broad range of wastewater and stormwater approaches--

`(A) to assist small treatment works to plan, develop, and obtain financing for eligible projects described in section 603(c);

`(B) to capitalize revolving loan funds to provide loans, in consultation with the State in which the assistance is provided, to rural and small municipalities for predevelopment costs (including costs for planning, design, associated preconstruction, and necessary activities for siting the facility and related elements) associated with wastewater infrastructure projects or short-term costs incurred for equipment replacement that is not part of regular operation and maintenance activities for existing wastewater systems, if--

`(i) any loan from the fund is made at or below the market interest rate, for a term not to exceed 10 years;

`(ii) the amount of any single loan does not exceed $100,000; and

`(iii) all loan repayments are credited to the fund;

`(C) to provide technical assistance and training for rural and small publicly owned treatment works and decentralized wastewater treatment systems to enable those treatment works and systems to protect water quality and achieve and maintain compliance with this Act; and

`(D) to disseminate information to rural and small municipalities with respect to planning, design, construction, and operation of publicly owned treatment works and decentralized wastewater treatment systems.

`(2) DISTRIBUTION OF GRANT- In carrying out this subsection, the Administrator shall ensure, to the maximum extent practicable, that technical assistance provided using funds from a grant under paragraph (1) is made available in each State.

`(3) CONSULTATION- As a condition of receiving a grant under this subsection, a qualified nonprofit technical assistance provider shall consult with each State in which grant funds are to be expended or otherwise made available before the grant funds are expended or made available in the State.

`(4) ANNUAL REPORT- For each fiscal year, a qualified nonprofit technical assistance provider that receives a grant under this subsection shall submit to the Administrator a report that--

`(A) describes the activities of the qualified nonprofit technical assistance provider using grant funds received under this subsection for the fiscal year; and

`(B) specifies--

`(i) the number of communities served;

`(ii) the sizes of those communities; and

`(iii) the type of financing provided by the qualified nonprofit technical assistance provider.

`(c) Authorization of Appropriations- There is authorized to be appropriated to carry out this section $25,000,000 for each of fiscal years 2006 through 2010.'.

(b) Guidance for Small Systems- Section 602 of the Federal Water Pollution Control Act (33 U.S.C. 1382) is amended by adding at the end the following:

`(c) Guidance for Small Systems-

`(1) DEFINITION OF SMALL SYSTEM- In this subsection, the term `small system' means a system--

`(A) for which a municipality or intermunicipal, interstate, or State agency seeks assistance under this title; and

`(B) that serves a population of 10,000 or fewer households.

`(2) SIMPLIFIED PROCEDURES- Not later than 1 year after the date of enactment of this subsection, the Administrator shall assist the States in establishing simplified procedures for small systems to obtain assistance under this title.

`(3) PUBLICATION OF MANUAL- Not later than 1 year after the date of enactment of this subsection, after providing notice and opportunity for public comment, the Administrator shall publish--

`(A) a manual to assist small systems in obtaining assistance under this title; and

`(B) in the Federal Register, notice of the availability of the manual.'.

SEC. 102. PROJECTS ELIGIBLE FOR ASSISTANCE.

Section 603 of the Federal Water Pollution Control Act (33 U.S.C. 1383) is amended by striking subsection (c) and inserting the following:

`(c) Projects Eligible for Assistance- Funds in each State water pollution control revolving fund shall be used only for--

`(1) providing financial assistance to any municipality or an intermunicipal, interstate, or State agency that principally treats municipal wastewater or domestic sewage for construction (including planning, design, associated preconstruction, and activities relating to the siting of a facility) of a treatment works (as defined in section 212);

`(2) implementation of a management program established under section 319;

`(3) development and implementation of a conservation and management plan under section 320;

`(4) providing financial assistance to a municipality or an intermunicipal, interstate, or State agency for projects to increase the security of wastewater treatment works (excluding any expenditure for operations or maintenance);

`(5) providing financial assistance to a municipality or an intermunicipal, interstate, or State agency for measures to control municipal stormwater, the primary purpose of which is the preservation, protection, or enhancement of water quality;

`(6) water conservation projects, the primary purpose of which is the protection, preservation, and enhancement of water quality; or

`(7) reuse, reclamation, and recycling projects, the primary purpose of which is the protection, preservation, and enhancement of water quality.'.

SEC. 103. WATER POLLUTION CONTROL REVOLVING LOAN FUNDS.

Section 603(d) of the Federal Water Pollution Control Act (33 U.S.C. 1383(d)) is amended--

(1) in paragraph (6), by striking `and' at the end;

(2) in paragraph (7), by striking the period at the end and inserting `; and'; and

(3) by adding at the end the following:

`(8) to carry out a project under paragraph (2) or (3) of section 601(a), which may be--

`(A) operated by a municipal, intermunicipal, or interstate entity, State, public or private utility, corporation, partnership, association, or nonprofit agency; and

`(B) used to make loans that will be fully amortized not later than 30 years after the date of the completion of the project.'.

SEC. 104. AFFORDABILITY.

(a) In General- Section 603 of the Federal Water Pollution Control Act (33 U.S.C. 1383) is amended--

(1) by redesignating subsections (e) through (h) as subsections (f) through (i), respectively; and

(2) by inserting after subsection (d) the following:

`(e) Types of Assistance for Disadvantaged Communities-

`(1) DEFINITION OF DISADVANTAGED COMMUNITY- In this subsection, the term `disadvantaged community' means the service area, or portion of a service area, of a treatment works that meets affordability criteria established after public review and comment by the State in which the treatment works is located.

`(2) LOAN SUBSIDY- Notwithstanding any other provision of this section, in a case in which the State makes a loan from the water pollution control revolving loan fund in accordance with subsection (c) to a disadvantaged community or a community that the State expects to become a disadvantaged community as the result of a proposed project, the State may provide additional subsidization, including--

`(A) the forgiveness of the principal of the loan; and

`(B) an interest rate on the loan of zero percent.

`(3) TOTAL AMOUNT OF SUBSIDIES- For each fiscal year, the total amount of loan subsidies made by the State pursuant to this subsection may not exceed 30 percent of the amount of the capitalization grant received by the State for the fiscal year.

`(4) EXTENDED TERM- A State may provide an extended term for a loan if the extended term--

`(A) terminates not later than the date that is 30 years after the date of completion of the project; and

`(B) does not exceed the expected design life of the project.

`(5) INFORMATION- The Administrator may publish information to assist States in establishing affordability criteria described in paragraph (1).'.

(b) Conforming Amendment- Section 221(d) of the Federal Water Pollution Control Act (33 U.S.C. 1301(d)) is amended in the second sentence by striking `603(h)' and inserting `603(i)'.

SEC. 105. TRANSFERABILITY OF FUNDS.

Section 603 of the Federal Water Pollution Control Act (33 U.S.C. 1383) (as amended by section 104(a)(1)) is amended by adding at the end the following:

`(j) Transfer of Funds-

`(1) IN GENERAL- The Governor of a State may--

`(A)(i) reserve not more than 33 percent of a capitalization grant made under this title; and

`(ii) add the funds reserved to any funds provided to the State under section 1452 of the Safe Drinking Water Act (42 U.S.C. 300j-12); and

`(B)(i) reserve for any year an amount that does not exceed the amount that may be reserved under subparagraph (A) for that year from capitalization grants made under section 1452 of that Act (42 U.S.C. 300j-12); and

`(ii) add the reserved funds to any funds provided to the State under this title.

`(2) STATE MATCH- Funds reserved under this subsection shall not be considered to be a State contribution for a capitalization grant required under this title or section 1452(b) of the Safe Drinking Water Act (42 U.S.C. 300j-12(b)).'.

SEC. 106. COSTS OF ADMINISTERING WATER POLLUTION CONTROL REVOLVING LOAN FUNDS.

Section 603(d)(7) of the Federal Water Pollution Control Act (33 U.S.C. 1383(d)(7)) is amended by striking `4 percent' and inserting `6 percent'.

SEC. 107. WATER POLLUTION CONTROL REVOLVING LOAN FUNDS.

Section 603 of the Federal Water Pollution Control Act (33 U.S.C. 1383) is amended by striking subsection (h) (as redesignated by section 104) and inserting the following:

`(h) Priority System Requirement-

`(1) DEFINITIONS- In this subsection:

`(A) RESTRUCTURING- The term `restructuring' means--

`(i) the consolidation of management functions or ownership with another facility; or

`(ii) the formation of cooperative partnerships.

`(B) TRADITIONAL WASTEWATER APPROACH- The term `traditional wastewater approach' means a managed system used to collect and treat wastewater from an entire service area consisting of--

`(i) collection sewers;

`(ii) a centralized treatment plant using biological, physical, or chemical treatment processes; and

`(iii) a direct point source discharge to surface water.

`(2) PRIORITY SYSTEM- In providing financial assistance from the water pollution control revolving fund of the State, the State shall--

`(A) give greater weight to an application for assistance by a treatment works if the application includes such other information as the State determines to be appropriate and--

`(i) an inventory of assets, including a description of the condition of those assets;

`(ii) a schedule for replacement of the assets;

`(iii) a financing plan indicating sources of revenue from ratepayers, grants, bonds, other loans, and other sources;

`(iv) a review of options for restructuring the treatment works;

`(v) a review of options for approaches other than a traditional wastewater approach that may include actions or projects that treat or minimize sewage or urban stormwater discharges using--

`(I) decentralized or distributed stormwater controls;

`(II) decentralized wastewater treatment;

`(III) low impact development technologies;

`(IV) stream buffers;

`(V) wetland restoration; or

`(VI) actions to minimize the quantity of and direct connections to impervious surfaces;

`(vi) demonstration of consistency with State, regional, and municipal watershed plans;

`(vii) a review of options for urban waterfront development or brownfields revitalization to be completed in conjunction with the project; or

`(viii) provides the applicant the flexibility through alternative means to carry out responsibilities under Federal regulations, that may include watershed permitting and other innovative management approaches, while achieving results that--

`(I) the State, with the delegated authority under section 402(a)(5), determines meet permit requirements for permits that have been issued in accordance with the national pollution discharge elimination system under section 402; or

`(II) the Administrator determines are measurably superior when compared to regulatory standards;

`(B) take into consideration appropriate chemical, physical, and biological data that the State considers reasonably available and of sufficient quality;

`(C) provide for public notice and opportunity to comment on the establishment of the system and the summary under subparagraph (D);

`(D) publish not less than biennially in summary form a description of projects in the State that are eligible for assistance under this title that indicates--

`(i) the priority assigned to each project under the priority system of the State; and

`(ii) the funding schedule for each project, to that extent the information is available; and

`(E) ensure that projects undertaken with assistance under this title are designed to achieve, as determined by the State, the optimum water quality management, consistent with the public health and water quality goals and requirements of this title.

`(3) SAVINGS CLAUSE- Nothing in paragraph (2)(A)(viii) affects the authority of the Administrator under section 402(a)(5).'.

SEC. 108. NONCOMPLIANCE.

Section 603 of the Federal Water Pollution Control Act (33 U.S.C. 1383) (as amended by section 105) is amended by adding at the end the following:

`(k) Noncompliance-

`(1) IN GENERAL- Except as provided in paragraph (2), no assistance (other than assistance that is to be used by a treatment works solely for planning, design, or security purposes) shall be provided under this title to a treatment works that has been in significant noncompliance with any requirement of this Act for any of the 4 quarters in the previous 8 quarters, unless the treatment works is in compliance with, or has entered into, an enforceable administrative order to effect compliance with the requirement.

`(2) EXCEPTION- A treatment works that is determined under paragraph (1) to be in significant noncompliance with a requirement described in that paragraph may receive assistance under this title if the Administrator and the State providing the assistance determine that--

`(A) the entity conducting the enforcement action on which the determination of significant noncompliance is based has determined that the use of assistance would enable the treatment works to take corrective action toward resolving the violations; or

`(B) the entity conducting the enforcement action on which the determination of significant noncompliance is based has determined that the assistance would be used on a portion of the treatment works that is not directly related to the cause of finding significant noncompliance.'.

SEC. 109. AUTHORIZATION OF APPROPRIATIONS.

The Federal Water Pollution Control Act is amended by striking section 607 (33 U.S.C. 1387) and inserting the following:

`SEC. 607. AUTHORIZATION OF APPROPRIATIONS.

`(a) In General- There are authorized to be appropriated to carry out this title--

`(1) $3,200,000,000 for each of fiscal years 2006 and 2007;

`(2) $3,600,000,000 for fiscal year 2008;

`(3) $4,000,000,000 for fiscal year 2009; and

`(4) $6,000,000,000 for fiscal year 2010.

`(b) Availability- Amounts made available under this section shall remain available until expended.

`(c) Reservation for Needs Surveys- Of the amount made available under subsection (a) to carry out this title for a fiscal year, the Administrator may reserve not more than $1,000,000 per year to pay the costs of conducting needs surveys under section 516(2).'.

SEC. 110. CRITICAL WATER INFRASTRUCTURE PROJECTS.

(a) Establishment- Not later than 180 days after the date of enactment of this Act, the Administrator shall establish a program under which grants are provided to eligible entities for use in carrying out projects and activities the primary purpose of which is watershed restoration through the protection or improvement of water quality.

(b) Project Selection-

(1) IN GENERAL- The Administrator may provide funds under this section to an eligible entity to carry out an eligible project described in paragraph (2).

(2) EQUITABLE DISTRIBUTION- The Administrator shall ensure an equitable distribution of projects under this section, taking into account cost and number of requests for each category listed in paragraph (3).

(3) ELIGIBLE PROJECTS- A project that is eligible to be carried out using funds provided under this section may include projects that--

(A) are listed on the priority list of a State under section 216 of the Federal Water Pollution Control Act (33 U.S.C. 1296);

(B) mitigate wet weather flows, including combined sewer overflows, sanitary sewer overflows, and stormwater discharges;

(C) upgrade publicly owned treatment works with a permitted design capacity to treat an annual average of at least 500,000 gallons of wastewater per day, the upgrade of which would produce the greatest nutrient load reductions at points of discharge, or result in the greatest environmental benefits, with nutrient removal technologies that are designed to reduce total nitrogen in discharged wastewater to an average annual concentration of 3 milligrams per liter;

(D) implement locally based watershed protection plans created by local nonprofit organizations that--

(i) provide a coordinating framework for management that focuses public and private efforts to address the highest priority water-related problems within a geographic area, considering both ground and surface water flow; and

(ii) includes representatives from both point source and nonpoint source contributors;

(E) are contained in a State plan developed in accordance with section 319 or 320 of the Federal Water Pollution Control Act (33 U.S.C. 1329, 1330); or

(F) include means to develop alternative water supplies.

(c) Local Participation- In prioritizing projects for implementation under this section, the Administrator shall consult with, and consider the priorities of--

(1) affected State and local governments; and

(2) public and private entities that are active in watershed planning and restoration.

(d) Cost Sharing- Before carrying out any project under this section, the Administrator shall enter into a binding agreement with 1 or more non-Federal interests that shall require the non-Federal interests--

(1) to pay 45 percent of the total costs of the project, which may include services, materials, supplies, or other in-kind contributions;

(2) to provide any land, easements, rights-of-way, and relocations necessary to carry out the project; and

(3) to pay 100 percent of any operation, maintenance, repair, replacement, and rehabilitation costs associated with the project.

(e) Waiver- The Administrator may waive the requirement to pay the non-Federal share of the cost of carrying out an eligible activity using funds from a grant provided under this section if the Administrator determines that an eligible entity is unable to pay, or would experience significant financial hardship if required to pay, the non-Federal share.

(f) Authorization of Appropriations- There is authorized to be appropriated to carry out this section $300,000,000 for each of fiscal years 2006 through 2010.

TITLE II--SAFE DRINKING WATER INFRASTRUCTURE

SEC. 201. PRECONSTRUCTION WORK.

Section 1452(a)(2) of the Safe Drinking Water Act (42 U.S.C. 300j-12(a)(2)) is amended in the second sentence--

(1) by striking `(not' and inserting `(including expenditures for planning, design, and associated preconstruction and for recovery for siting of the facility and related elements but not'; and

(2) by inserting before the period at the end the following: `or to replace or rehabilitate aging collection, treatment, storage (including reservoirs), or distribution facilities of public water systems or provide for capital projects to upgrade the security of public water systems'.

SEC. 202. AFFORDABILITY.

Section 1452(d)(3) of the Safe Drinking Water Act (42 U.S.C. 300j-12(d)(3)) is amended in the first sentence by inserting `, or portion of a service area,' after `service area'.

SEC. 203. SAFE DRINKING WATER REVOLVING LOAN FUNDS.

Section 1452(g) of the Safe Drinking Water Act (42 U.S.C. 300j-12(g)) is amended--

(1) paragraph (2)--

(A) in the first sentence, by striking `4' and inserting `6'; and

(B) by striking `1419,' and all that follows through `1933.' and inserting `1419.'; and

(2) by adding at the end the following:

`(5) TRANSFER OF FUNDS-

`(A) IN GENERAL- The Governor of a State may--

`(i)(I) reserve not more than 33 percent of a capitalization grant made under this section; and

`(II) add the funds reserved to any funds provided to the State under section 601 of the Federal Water Pollution Control Act (33 U.S.C. 1381); and

`(ii)(I) reserve for any fiscal year an amount that does not exceed the amount that may be reserved under clause (i)(I) for that year from capitalization grants made under section 601 of that Act (33 U.S.C. 1381); and

`(II) add the reserved funds to any funds provided to the State under this section.

`(B) STATE MATCH- Funds reserved under this paragraph shall not be considered to be a State match of a capitalization grant required under this section or section 602(b) of the Federal Water Pollution Control Act (33 U.S.C. 1382(b)).'.

SEC. 204. OTHER AUTHORIZED ACTIVITIES.

Section 1452(k)(2)(D) of the Safe Drinking Water Act (42 U.S.C. 300j-12(k)(2)(D)) is amended by inserting before the period at the end the following: `(including implementation of source water protection plans)'.

SEC. 205. PRIORITY SYSTEM REQUIREMENTS.

Section 1452(b)(3) of the Safe Drinking Water Act (42 U.S.C. 300j-12(b)(3)) is amended--

(1) by redesignating subparagraph (B) as subparagraph (D);

(2) by striking subparagraph (A) and inserting the following:

`(A) DEFINITION OF RESTRUCTURING- In this paragraph, the term `restructuring' means changes in operations (including ownership, accounting, rates, maintenance, consolidation, and alternative water supply).

`(B) PRIORITY SYSTEM- An intended use plan shall provide, to the maximum extent practicable, that priority for the use of funds be given to projects that--

`(i) address the most serious risk to human health;

`(ii) are necessary to ensure compliance with this title (including requirements for filtration); and

`(iii) assist systems most in need on a per-household basis according to State affordability criteria.

`(C) WEIGHT GIVEN TO APPLICATIONS- After determining project priorities under subparagraph (B), an intended use plan shall further provide that the State shall give greater weight to an application for assistance by a community water system if the application includes such other information as the State determines to be necessary and--

`(i) an inventory of assets, including a description of the condition of the assets;

`(ii) a schedule for replacement of assets;

`(iii) a financing plan indicating sources of revenue from ratepayers, grants, bonds, other loans, and other sources;

`(iv) a review of options for restructuring the public water system;

`(v) demonstration of consistency with State, regional, and municipal watershed plans; or

`(vi) a review of options for urban waterfront development or brownfields revitalization to be completed in conjunction with the project;'; and

(3) in subparagraph (D) (as redesignated by paragraph (1)), by striking `periodically' and inserting `at least biennially'.

SEC. 206. AUTHORIZATION OF APPROPRIATIONS.

Section 1452 of the Safe Drinking Water Act (42 U.S.C. 300j-12) is amended by striking subsection (m) and inserting the following:

`(m) Authorization of Appropriations-

`(1) IN GENERAL- There are authorized to be appropriated to carry out this section--

`(A) $1,500,000,000 for fiscal year 2006;

`(B) $2,000,000,000 for each of fiscal years 2007 and 2008;

`(C) $3,500,000,000 for fiscal year 2009; and

`(D) $6,000,000,000 for fiscal year 2010.

`(2) AVAILABILITY- Amounts made available under this subsection shall remain available until expended.

`(3) RESERVATION FOR NEEDS SURVEYS- Of the amount made available under paragraph (1) to carry out this section for a fiscal year, the Administrator may reserve not more than $1,000,000 per year to pay the costs of conducting needs surveys under subsection (h).'.

SEC. 207. CRITICAL DRINKING WATER INFRASTRUCTURE PROJECTS.

(a) Establishment- Not later than 180 days after the date of enactment of this Act, the Administrator of the Environmental Protection Agency shall establish a program under which grants are provided to eligible entities for use in carrying out projects and activities the primary purpose of which is to assist community water systems in meeting the requirements of the Safe Drinking Water Act (42 U.S.C. 300f et seq.).

(b) Project Selection- A project that is eligible to be carried out using funds provided under this section may include projects that--

(1) develop alternative water sources;

(2) provide assistance to small systems; or

(3) assist a community water system--

(A) to comply with a national primary drinking water regulation; or

(B) to mitigate groundwater contamination.

(c) Eligible Entities- An entity eligible to receive a grant under this section is--

(1) a community water system as defined in section 1401 of the Safe Drinking Water Act (42 U.S.C. 300f); or

(2) a system that is located in an area governed by an Indian Tribe, as defined in section 1401 of the Safe Drinking Water Act (42 U.S.C. 300f);

(d) Priority- In prioritizing projects for implementation under this section, the Administrator shall give priority to community water systems that--

(1) serve a community that, under affordability criteria established by the State under section 1452(d)(3) of the Safe Drinking Water Act (42 U.S.C. 300j-12), is determined by the State to be--

(A) a disadvantaged community; or

(B) a community that may become a disadvantaged community as a result of carrying out an eligible activity; or

(2) serve a community with a population of less than 10,000 households.

(e) Local Participation- In prioritizing projects for implementation under this section, the Administrator shall consult with, and consider the priorities of, affected States, Tribes, and local governments.

(f) Cost Sharing- Before carrying out any project under this section, the Administrator shall enter into a binding agreement with 1 or more non-Federal interests that shall require the non-Federal interests--

(1) to pay 45 percent of the total costs of the project, which may include services, materials, supplies, or other in-kind contributions;

(2) to provide any land, easements, rights-of-way, and relocations necessary to carry out the project; and

(3) to pay 100 percent of any operation, maintenance, repair, replacement, and rehabilitation costs associated with the project.

(g) Waiver- The Administrator may waive the requirement to pay the non-Federal share of the cost of carrying out an eligible activity using funds from a grant provided under this section if the Administrator determines that an eligible entity is unable to pay, or would experience significant financial hardship if required to pay, the non-Federal share.

(h) Authorization of Appropriations- There is authorized to be appropriated to carry out this section $300,000,000 for each of fiscal years 2006 through 2010.

SEC. 208. SMALL SYSTEM REVOLVING LOAN FUNDS.

Section 1442(e) of the Safe Drinking Water Act (42 U.S.C. 300j-1(e)) is amended--

(1) in the first sentence, by striking `The Administrator may provide' and inserting the following:

`(1) IN GENERAL- The Administrator may provide'; and

(2) by adding at the end the following:

`(2) SMALL SYSTEM REVOLVING LOAN FUND-

`(A) IN GENERAL- In addition to amounts provided under this section, the Administrator may provide grants to qualified private, nonprofit entities to capitalize revolving funds to provide financing to eligible entities described in subparagraph (B) for--

`(i) predevelopment costs (including costs for planning, design, associated preconstruction, and necessary activities for siting the facility and related elements) associated with proposed water projects or with existing water systems; and

`(ii) short-term costs incurred for replacement equipment, small-scale extension services, or other small capital projects that are not part of the regular operations and maintenance activities of existing water systems.

`(B) ELIGIBLE ENTITIES- To be eligible for assistance under this paragraph, an entity shall be a small water system (as described in section 1412(b)(4)(E)(ii)).

`(C) MAXIMUM AMOUNT OF LOANS- The amount of financing made to an eligible entity under this paragraph shall not exceed--

`(i) $100,000 for costs described in subparagraph (A)(i); and

`(ii) $100,000 for costs described in subparagraph (A)(ii).

`(D) TERM- The term of a loan made to an eligible entity under this paragraph shall not exceed 10 years.

`(E) ANNUAL REPORT- For each fiscal year, a qualified private, nonprofit entity that receives a grant under subparagraph (A) shall submit to the Administrator a report that--

`(i) describes the activities of the qualified private, nonprofit entity under this paragraph for the fiscal year; and

`(ii) specifies--

`(I) the number of communities served;

`(II) the sizes of those communities; and

`(III) the type of financing provided by the qualified private, nonprofit entity.

`(F) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this subsection $25,000,000 for each of fiscal years 2006 through 2010.'.

SEC. 209. STUDY ON LEAD CONTAMINATION IN DRINKING WATER.

(a) In General- As soon as practicable after the date of enactment of this Act, the Administrator of the Environmental Protection Agency shall enter into a cooperative agreement with the National Academy of Sciences to carry out a study to analyze existing market conditions for plumbing components, including pipes, faucets, water meters, valves, household valves, and any other plumbing components that come into contact with water commonly used for human consumption.

(b) Components- In conducting the study under subsection (a), the National Academy of Sciences shall evaluate for each category of plumbing components described in subsection (a)--

(1) the availability of plumbing components in each category with lead content below 8 percent, including those between 0 percent and 4 percent and those between 4 percent and 8 percent;

(2) the relative market share of the plumbing components;

(3) the relative cost of the plumbing components;

(4) the issues surrounding transition from current market to plumbing components with not more than 0.2 percent lead;

(5) the feasibility of manufacturing plumbing components with lead levels below 8 percent; and

(6) the use of lead alternatives in plumbing components with lead levels below 8 percent.

(c) Report- Not late than 1 year after the date of enactment of this Act, the National Academy of Sciences shall submit to the Committee on Environment and Public Works of the Senate and the Committee on Energy and Commerce of the House of Representatives a report describing the findings of the study under this section.

(d) Authorization of Appropriations- There is authorized to be appropriated to carry out this section $500,000.

SEC. 210. DISTRICT OF COLUMBIA LEAD SERVICE LINE REPLACEMENT.

(a) Authorization of Appropriations- There is authorized to be appropriated to carry out lead service line replacement in the District of Columbia $30,000,000 for each of fiscal years 2007 through 2011.

(b) Lead Service Line Replacement Assistance Fund-

(1) IN GENERAL- Of the funds provided under subsection (a), not more than $2,000,000 per year may be allocated for water service line replacement grants to provide assistance to low-income residents to replace the privately-owned portion of lead service lines.

(2) LIMITATION- Individual grants shall be limited to not more than $5,000.

(3) DEFINITION OF LOW INCOME- For the purpose of this subsection, the term `low-income' shall be defined by the District of Columbia.

TITLE III--MISCELLANEOUS

SEC. 301. DEFINITIONS.

In this title:

(1) ADMINISTRATOR- The term `Administrator' means the Administrator of the Environmental Protection Agency.

(2) SECRETARY- The term `Secretary' means the Secretary of the Interior, acting through the Director of the United States Geological Survey.

SEC. 302. DEMONSTRATION GRANT PROGRAM FOR WATER QUALITY ENHANCEMENT AND MANAGEMENT.

(a) Establishment-

(1) IN GENERAL- As soon as practicable after the date of enactment of this Act, the Administrator shall establish a nationwide demonstration grant program to--

(A) promote innovations in technology and alternative approaches to water quality management or water supply; or

(B) reduce costs to municipalities incurred in complying with--

(i) the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.); and

(ii) the Safe Drinking Water Act (42 U.S.C. 300f et seq.).

(2) SCOPE- The demonstration grant program shall consist of 10 projects each year, to be carried out in municipalities selected by the Administrator under subsection (b).

(b) Selection of Municipalities-

(1) APPLICATION- A municipality that seeks to participate in the demonstration grant program shall submit to the Administrator a plan that--

(A) is developed in coordination with--

(i) the agency of the State having jurisdiction over water quality or water supply matters; and

(ii) interested stakeholders;

(B) describes water impacts specific to urban or rural areas;

(C) includes a strategy under which the municipality, through participation in the demonstration grant program, could effectively--

(i) address water quality or water supply problems; and

(ii) achieve the water quality goals that--

(I) could be achieved using more traditional methods; and

(II) are required under--

(aa) the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.); or

(bb) the Safe Drinking Water Act (42 U.S.C. 300f et seq.); and

(D) includes a schedule for achieving the water quality or water supply goals of the municipality.

(2) TYPES OF PROJECTS- In carrying out the demonstration grant program, the Administrator shall provide grants for projects relating to water supply or water quality matters such as--

(A) excessive nutrient growth;

(B) urban or rural population pressure;

(C) lack of an alternative water supply;

(D) difficulties in water conservation and efficiency;

(E) lack of support tools and technologies to rehabilitate and replace water supplies;

(F) lack of monitoring and data analysis for water distribution systems;

(G) nonpoint source water pollution (including stormwater);

(H) sanitary overflows;

(I) combined sewer overflows;

(J) problems with naturally occurring constituents of concern;

(K) problems with erosion and excess sediment;

(L) new approaches to water treatment, distribution, and collection systems; and

(M) new methods for collecting and treating wastewater (including system design and nonstructural alternatives).

(3) RESPONSIBILITIES OF ADMINISTRATOR- In providing grants for projects under this subsection, the Administrator shall--

(A) ensure, to the maximum extent practicable, that--

(i) the demonstration program includes a variety of projects with respect to--

(I) geographic distribution;

(II) innovative technologies used for the projects; and

(III) nontraditional approaches (including low-impact development technologies) used for the projects; and

(ii) each category of project described in paragraph (2) is adequately represented;

(B) give higher priority to projects that--

(i) address multiple problems; and

(ii) are regionally applicable;

(C) ensure, to the maximum extent practicable, that at least 1 community having a population of 10,000 or fewer individuals receives a grant for each fiscal year; and

(D) ensure that, for each fiscal year, no municipality receives more than 25 percent of the total amount of funds made available for the fiscal year to provide grants under this section.

(4) COST SHARING-

(A) IN GENERAL- Except as provided in subparagraph (B), the non-Federal share of the total cost of a project funded by a grant under this section shall be not less than 20 percent.

(B) WAIVER- The Administrator may reduce or eliminate the non-Federal share of the cost of a project for reasons of affordability.

(c) Reports-

(1) REPORTS FROM GRANT RECIPIENTS- A recipient of a grant under this section shall submit to the Administrator, on the date of completion of a project of the recipient and on each of the dates that is 1, 2, and 3 years after that date, a report that describes the effectiveness of the project.

(2) REPORTS TO CONGRESS- Not later than 2 years after the date of enactment of this Act, and every 2 years thereafter, the Administrator shall submit to the Committee on Environment and Public Works of the Senate and the Committee on Transportation and Infrastructure and the Committee on Energy and Commerce of the House of Representatives a report that describes the status and results of the demonstration program.

(d) Incorporation of Results and Information- To the maximum extent practicable, the Administrator shall incorporate the results of, and information obtained from, successful projects under this section into programs administered by the Administrator.

(e) Research and Development-

(1) IN GENERAL- As soon as practicable after the date of enactment of this Act, the Administrator shall, through a competitive process, award grants and enter into contracts and cooperative agreements with research institutions, educational institutions, and other appropriate entities (including consortia of such institutions and entities) for research and development on the use of innovative and alternative technologies to improve water quality or drinking water supply.

(2) TYPES OF PROJECTS- In carrying out this subsection, the Administrator may select projects relating to such matters as innovative or alternative technologies, approaches, practices, or methods--

(A) to increase the effectiveness and efficiency of public water supply systems, including--

(i) source water protection;

(ii) water use reduction;

(iii) water reuse;

(iv) water treatment;

(v) water distribution and collection systems; and

(vi) water security;

(B) to encourage the use of innovative or alternative technologies or approaches relating to water supply or availability;

(C) to increase the effectiveness and efficiency of new and existing treatment works, including--

(i) methods of collecting, treating, dispersing, reusing, reclaiming, and recycling wastewater;

(ii) system design;

(iii) nonstructural alternatives;

(iv) decentralized approaches;

(v) assessment;

(vi) water efficiency; and

(vii) wastewater security;

(D) to increase the effectiveness and efficiency of municipal separate storm sewer systems;

(E) to promote new water treatment technologies, including commercialization and dissemination strategies for adoption of innovative or alternative low impact development technologies in the homebuilding industry; or

(F) to maintain a clearinghouse of technologies developed under this subsection and subsection (a) at a research consortium or institute.

(3) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this subsection $20,000,000 for each of fiscal years 2006 through 2010.

(f) Authorization of Appropriations- There is authorized to be appropriated to carry out this section (other than subsection (e)) $20,000,000 for each of fiscal years 2006 through 2010.

SEC. 303. AGRICULTURAL POLLUTION CONTROL TECHNOLOGY GRANT PROGRAM.

(a) Definitions- In this section:

(1) ADMINISTRATOR- The term `Administrator' means the Administrator of the Environmental Protection Agency.

(2) AGRICULTURAL COMMODITY- The term `agricultural commodity' means--

(A) agricultural, horticultural, viticultural, and dairy products;

(B) livestock and the products of livestock;

(C) the products of poultry and bee raising;

(D) the products of forestry;

(E) other commodities raised or produced on agricultural sites, as determined to be appropriate by the Secretary; and

(F) products processed or manufactured from products specified in subparagraphs (A) through (E), as determined by the Secretary.

(3) AGRICULTURAL PROJECT- The term `agricultural project' means an agricultural pollution control technology project that, as determined by the Administrator--

(A) is carried out at an agricultural site; and

(B) achieves demonstrable reductions in air and water pollution.

(4) AGRICULTURAL SITE- The term `agricultural site' means a farming or ranching operation of a producer.

(5) PRODUCER- The term `producer' means any person who is engaged in the production and sale of an agricultural commodity in the United States and who owns, or shares the ownership and risk of loss of, the agricultural commodity.

(6) REVOLVING FUND- The term `revolving fund' means an agricultural pollution control technology State revolving fund established by a State using amounts provided under subsection (b)(1).

(7) SECRETARY- The term `Secretary' means the Secretary of Agriculture.

(b) Grants for Agricultural State Revolving Funds-

(1) IN GENERAL- As soon as practicable after the date of enactment of this section, the Administrator shall provide to each eligible State described in paragraph (2) 1 or more capitalization grants, that cumulatively equal no more than $1,000,000 per State, for use in establishing, within an agency of the State having jurisdiction over agriculture or environmental quality, an agricultural pollution control technology State revolving fund.

(2) ELIGIBLE STATES- An eligible State referred to in paragraph (1) is a State that agrees, prior to receipt of a capitalization grant under paragraph (1)--

(A) to establish, and deposit the funds from the grant in, a revolving fund;

(B) to provide, at a minimum, a State share in an amount equal to 20 percent of the capitalization grant;

(C) to use amounts in the revolving fund to make loans to producers in accordance with subsection (c); and

(D) to return amounts in the revolving fund if no loan applications are granted within 2 years of the receipt of the initial capitalization grant.

(c) Loans to Producers-

(1) USE OF FUNDS- A State that establishes a revolving fund under subsection (b)(2) shall use amounts in the revolving fund to provide loans to producers for use in designing and constructing agricultural projects.

(2) MAXIMUM AMOUNT OF LOAN- The amount of a loan made to a producer using funds from a revolving fund shall not exceed $250,000, in the aggregate, for all agricultural projects serving an agricultural site of the producer.

(3) CONDITIONS ON LOANS- A loan made to a producer using funds from a revolving fund shall--

(A) have an interest rate that is not more than the market interest rate, including an interest-free loan; and

(B) be repaid to the revolving fund not later than 10 years after the date on which the loan is made.

(d) Requirements for Producers-

(1) IN GENERAL- A producer that seeks to receive a loan from a revolving fund shall--

(A) submit to the State in which the agricultural site of the producer is located an application that--

(i) contains such information as the State may require; and

(ii) demonstrates, to the satisfaction of the State, that each project proposed to be carried out with funds from the loan is an agricultural project; and

(B) agree to expend all funds from a loan in an expeditious and timely manner, as determined by the State.

(2) MAXIMUM PERCENTAGE OF AGRICULTURAL PROJECT COST- Subject to subsection (c)(2), a producer that receives a loan from a revolving fund may use funds from the loan to pay up to 100 percent of the cost of carrying out an agricultural project.

(e) Authorization of Appropriations- There is authorized to be appropriated to carry out this section $50,000,000.

SEC. 304. STATE REVOLVING FUND REVIEW PROCESS.

As soon as practicable after the date of enactment of this Act, the Administrator shall--

(1) consult with States, utilities, and other Federal agencies providing financial assistance to identify ways to expedite and improve the application and review process for the provision of assistance from--

(A) the State water pollution control revolving funds established under title VI of the Federal Water Pollution Control Act (33 U.S.C. 1381 et seq.); and

(B) the State drinking water treatment revolving loan funds established under section 1452 of the Safe Drinking Water Act (42 U.S.C. 300j-12);

(2) take such administrative action as is necessary to expedite and improve the process as the Administrator has authority to take under existing law;

(3) collect information relating to innovative approaches taken by any State to simplify the application process of the State, and provide the information to each State; and

(4) submit to Congress a report that, based on the information identified under paragraph (1), contains recommendations for legislation to facilitate further streamlining and improvement of the process.

SEC. 305. COST OF SERVICE STUDY.

(a) In General- Not later than 2 years after the date of enactment of this Act, the Administrator shall enter into a contract with the National Academy of Sciences for, and the National Academy of Sciences shall complete and provide to the Administrator the results of, a study of the means by which public water systems and treatment works selected by the Academy in accordance with subsection (c) meet the costs associated with operations, maintenance, capital replacement, and regulatory requirements.

(b) Required Elements-

(1) AFFORDABILITY- The study shall, at a minimum--

(A) determine whether the rates at public water systems and treatment works for communities included in the study were established using a full-cost pricing model;

(B) if a full-cost pricing model was not used, identify any incentive rate systems that have been successful in significantly reducing--

(i) per capita water demand;

(ii) the volume of wastewater flows;

(iii) the volume of stormwater runoff; or

(iv) the quantity of pollution generated by stormwater;

(C) identify a set of best industry practices that public water systems and treatment works may use in establishing a rate structure that--

(i) adequately addresses the true cost of services provided to consumers by public water systems and treatment works, including infrastructure replacement;

(ii) encourages water conservation; and

(iii) takes into consideration the needs of disadvantaged individuals and communities, as identified by the Administrator;

(D) identify existing standards for affordability;

(E) determine the manner in which those standards are determined and defined;

(F) determine the manner in which affordability varies with respect to communities of different sizes and in different regions; and

(G) determine the extent to which affordability affects the decision of a community to increase public water system and treatment works rates (including the decision relating to the percentage by which those rates should be increased).

(2) DISADVANTAGED COMMUNITIES- The study shall, at a minimum--

(A) survey a cross-section of States representing different sizes, demographics, and geographical regions;

(B) describe, for each State described in subparagraph (A), the definition of `disadvantaged community' used in the State in carrying out projects and activities under the Safe Drinking Water Act (42 U.S.C. 300f et seq.);

(C) review other means of identifying the meaning of the term `disadvantaged', as that term applies to communities;

(D) determine which factors and characteristics are required for a community to be considered `disadvantaged'; and

(E) evaluate the degree to which factors such as a reduction in the tax base over a period of time, a reduction in population, the loss of an industrial base, and the existence of areas of concentrated poverty are taken into account in determining whether a community is a disadvantaged community.

(c) Selection of Communities- The National Academy of Sciences shall select communities, the public water system and treatment works rate structures of which are to be studied under this section, that include a cross-section of communities representing various populations, income levels, demographics, and geographical regions.

(d) Use of Results of Study- On receipt of the results of the study, the Administrator shall--

(1) submit to Congress a report that describes the results of the study; and

(2) make the results available to treatment works and public water systems for use by the publicly owned treatment works and public water systems, on a voluntary basis, in determining whether 1 or more new approaches may be implemented at facilities of the publicly owned treatment works and public water systems.

(e) Authorization of Appropriations- There is authorized to be appropriated to carry out this section $1,000,000 for each of fiscal years 2006 and 2007.

SEC. 306. WATER RESOURCES STUDY.

(a) Assessment-

(1) IN GENERAL- The Secretary shall--

(A) not later than 2 years after the date of enactment of this Act, conduct an assessment of water resources in the United States; and

(B) update the assessment every 2 years thereafter.

(2) COMPONENTS- The assessment shall, at a minimum--

(A) measure the status and trends of--

(i) fresh water in rivers and reservoirs;

(ii) groundwater levels and volume of useable fresh water stored in aquifers; and

(iii) fresh water withdrawn from streams and aquifers in the United States; and

(B) provide those measurements for--

(i) watersheds defined by the 352 hydrologic accounting units of the United States; and

(ii) major aquifers of the United States, as identified by the Secretary.

(3) REPORT- Not later than 1 year after the date of completion of the assessment and every 2 years thereafter, the Secretary shall submit to Congress a report--

(A) describing the results of the assessment; and

(B) containing any recommendations of the Secretary relating to the assessment that--

(i) are consistent with existing laws, treaties, decrees, and interstate compacts; and

(ii) respect the primary role of States in adjudicating, administering, and regulating water rights and uses.

(b) Water Resource Research Priorities-

(1) IN GENERAL- The Secretary shall coordinate a process among Federal agencies and appropriate State agencies to develop and publish, not later than 1 year after the date of enactment of this Act, a list of water resource research priorities that focuses on--

(A) water supply monitoring;

(B) means of capturing excess water and flood water for conservation and use in the event of a drought;

(C) strategies to conserve existing water supplies, including recommendations for repairing aging infrastructure;

(D) identifying incentives to ensure an adequate and dependable supply of water;

(E) identifying available technologies and other methods to optimize water supply reliability, availability, and quality, while safeguarding the environment; and

(F) improving the quality of water resource information available to State, tribal, and local water resource managers.

(2) USE OF LIST- The list published under paragraph (1) shall be used by Federal agencies as a guide in making decisions on the allocation of water research funding.

(c) Information Delivery System-

(1) IN GENERAL- The Secretary shall coordinate a process to develop an effective information delivery system to communicate information described in paragraph (2) to--

(A) decisionmakers at the Federal, regional, State, tribal, and local levels;

(B) the private sector; and

(C) the general public.

(2) TYPES OF INFORMATION- The information referred to in paragraph (1) may include--

(A) the results of the national water resource assessments under subsection (a);

(B) a summary of the Federal water research priorities developed under subsection (b);

(C) near real-time data and other information on water shortages and surpluses;

(D) planning models for water shortages or surpluses (at various levels including State, river basin, and watershed levels);

(E) streamlined procedures for States and localities to interact with and obtain assistance from Federal agencies that perform water resource functions; and

(F) other water resource materials, as the Secretary determine appropriate.

(d) Report to Congress- Not later than 2 years after the date of enactment of this Act, and every 2 years thereafter through fiscal year 2009, the Secretary shall submit to Congress a report on the implementation of this section.

(e) Savings Clause- Nothing in this section--

(1) modifies, supercedes, abrogates, impairs, or otherwise affects in any way--

(A) any right or jurisdiction of any State with respect to the water (including boundary water) of the State;

(B) the authority of any State to allocate quantities of water within areas under the jurisdiction of the State; or

(C) any right or claim to any quantity or use of water that has been adjudicated, allocated, or claimed--

(i) in accordance with State law;

(ii) in accordance with subsections (a) through (c) of section 208 of the Department of Justice Appropriation Act, 1953 (43 U.S.C. 666);

(iii) by or pursuant to an interstate compact; or

(iv) by a decision of the United States Supreme Court;

(2) requires a change in the nature of use or the transfer of any right to use water or creates a limitation on the exercise of any right to use water; or

(3) requires modifying the delivery, diversion, non-diversion, allocation, storage, or release from storage of any water to be delivered by contract.

(f) Authorization of Appropriations- There are authorized to be appropriated--

(1) to carry out the report authorized by this section, $3,000,000, to remain available until expended; and

(2) to carry out the updates authorized by subsection (a)(1)(B), such sums as are necessary.

END