Order Code IB10118
CRS Issue Brief for Congress
Received through the CRS Web
Safe Drinking Water Act:
Implementation and Issues
Updated July 3, 2003
Mary Tiemann
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Introduction
The 1996 SDWA Amendments
Regulated Public Water Systems
Regulating Drinking Water Contaminants
Issues in the 108th Congress
Drinking Water Infrastructure Funding
Drinking Water State Revolving Fund
Funding needs and issues
Drinking Water Security
Small Systems Issues
Small system variances
Exemptions
Compliance and affordability issues
State Administration of the Drinking Water Program
Methyl Tertiary Butyl Ether (MTBE)
LEGISLATION
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
FOR ADDITIONAL READING

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Safe Drinking Water Act: Implementation and Issues
SUMMARY
In the 108th Congress, key drinking water
other efforts to improve water security.
issues are likely to involve water infrastruc-
ture funding and drinking water problems
A continuing issue concerns the avail-
caused by specific contaminants, such as the
ability of funding for infrastructure projects
gasoline additive methyl tertiary butyl ether
needed by public water systems to comply
(MTBE) and perchlorate. Congress last
with SDWA rules and to meet other needs.
reauthorized the Safe Drinking Water Act
Congress authorized a drinking water state
(SDWA) in 1996, and although funding au-
revolving fund (DWSRF) program in 1996 to
thority for most SDWA programs expires in
help communities finance projects needed to
FY2003, broad reauthorization efforts are not
comply with SDWA standards. However,
expected as EPA, states, and water utilities
studies suggest that a significant funding gap
continue implementing the 1996 amendments.
exists and will continue to grow as SDWA
requirements increase and infrastructure ages.
The 108th Congress has renewed efforts
to address drinking water contamination by
During the past Congress, concern over
MTBE. On April 11, the House passed H.R. 6,
the cost of drinking water standards (espe-
a broad energy bill that authorizes appropria-
cially the arsenic standard) blended into the
tions from the Leaking Underground Storage
larger debate over the federal role in assisting
Tank (LUST) Trust Fund to remediate MTBE
communities with financing drinking water
contamination. In addition, Senate-passed S.
infrastructure – an issue that has become more
195, a LUST bill, and S. 791, a fuels bill
challenging for Congress in a time of tight-
reported by the Environment and Public
ened budgets. Legislation to increase funding
Works Committee, both authorize funding for
authority for water infrastructure programs has
remediation and prevention of MTBE leaks.
been under discussion. However, in light of
On June 6, the text of S. 791 was added as an
funding constraints and large estimated needs,
amendment to the Senate energy bill, S. 14.
authorizing committees also have been explor-
ing innovative and alternative options for
Major drinking water issues in the 107th
financing water infrastructure projects as a
Congress included drinking water infrastruc-
means of helping communities address a wide
ture funding and the security of water sup-
array of infrastructure needs.
plies. In addition, numerous bills were intro-
duced targeting specific contaminants of
A related issue concerns the financial,
concern, especially arsenic and MTBE.
technical, and managerial capacity of small
water systems to comply with the growing
The 107th Congress addressed drinking
number of increasingly complex SDWA
water security in the Bioterrorism Prepared-
regulations. S. 1961, a water infrastructure
ness Act (P.L. 107-188), which amended
bill reported last year by the Senate Environ-
SDWA to require community water systems
ment and Public Works Committee, addressed
to conduct vulnerability assessments and
funding and capacity development issues.
prepare emergency response plans. Drinking
This legislative approach could be of interest
water security remains a priority, and the
again in this Congress.
108th Congress may be interested in oversee-
ing implementation of these provisions and
Congressional Research Service
˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
The 108th Congress has acted on several bills that address drinking water contamination
caused by the gasoline additive methyl tertiary butyl ether (MTBE). (Although these bills do
not amend the Safe Drinking Water Act, they address a drinking water contamination issue
that has become a major concern for public water suppliers.) On April 11, the House passed
H.R. 6, a broad energy bill, that authorizes the use of $850 million from the LUST Trust
Fund for addressing releases of MTBE and other fuel oxygenates, such as ethanol. On May
1, 2003, the Senate passed S. 195 (S.Rept. 108-13), which focuses on preventing leaks from
underground storage tanks and authorizes the appropriation of $125 million from the Leaking
Underground Storage Tank (LUST) Trust Fund specifically for remediating MTBE
contamination. On June 3, the Senate Environment and Public Works Committee reported
S. 791 (S.Rept. 108-57), a broader fuels bill that bans MTBE and authorizes $200 million
for remediating contamination caused by MTBE and other ether additives. An amendment
that was basically the same as S. 791 was added to the Senate energy bill, S. 14, on June 6.
BACKGROUND AND ANALYSIS
Introduction
The Safe Drinking Water Act (SDWA), title XIV of the Public Health Service Act (42
U.S.C. 300f-300j-26), is the key federal law for protecting public water supplies from
harmful contaminants. First enacted in 1974 and substantially amended in 1986 and 1996,
the Act is administered through programs that regulate contaminants in public water supplies,
provide funding for infrastructure projects, protect sources of drinking water, and promote
the capacity of public water systems to comply with SDWA regulations. The 1974 law
established the current federal-state arrangement in which states and tribes may be delegated
primary enforcement and implementation authority (primacy) for the drinking water program
by the Environmental Protection Agency (EPA), which is the federal agency responsible for
administering the law. The state-administered Public Water Supply Supervision Program
remains the basic program for regulating the nation’s public water systems. (For more
information, see CRS Report RL31243, Safe Drinking Water Act: A Summary of the Act and
Its Major Requirements.)
More than 90% of people in the United States get their drinking water from one of the
nearly 54,000 community water systems nationwide. Congress passed the SDWA in 1974,
after a nationwide study of community water systems revealed widespread water quality
problems and health risks resulting from poor operating procedures, inadequate facilities, and
poor management of water supplies in communities of all sizes. Since then, government and
private efforts to implement the Act have led to better public water system management and
more information about, and greater confidence in, the quality of water provided at the tap.
Significant progress has been made during the 28 years of the federal drinking water
program. Some 91 drinking water contaminants are now regulated, and EPA reports that the
population served by community water systems that met all health-based standards increased
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from 83% in 1994 to 91% in 2002. Nonetheless, drinking water safety concerns and
challenges remain. EPA and state enforcement data indicate that public water systems still
incur tens of thousands of violations of SDWA requirements each year. These violations
primarily involve monitoring and reporting requirements, but also include thousands of
violations of standards and treatment techniques. Moreover, monitoring violations create
uncertainty as to whether systems with reporting violations actually met the applicable
health-based standards. Concern also exists over the potential health effects of contaminants
for which drinking water standards have not been set, such as perchlorate (the main
ingredient in solid rocket fuel) and the gasoline additive methyl tertiary butyl ether (MTBE).
The 1996 SDWA Amendments
The 104th Congress made numerous changes to the Act with the SDWA Amendments
of 1996 (P.L. 104-182), culminating a multi-year effort to amend a law that was widely
criticized as having too little flexibility, too many unfunded mandates, and an arduous but
unfocused regulatory schedule. Among the key provisions, the 1996 amendments authorized
a drinking water state revolving loan fund (DWSRF) program to help public water systems
finance projects needed to comply with SDWA rules. The amendments also established a
process for selecting contaminants for regulation based on health risk and occurrence, gave
EPA some added flexibility to consider costs and benefits in setting most new standards, and
established schedules for regulating certain contaminants (such as Cryptosporidium, arsenic,
and radon). The law added several provisions aimed at building the capacity of water
systems (especially small systems) to comply with SDWA regulations, and it imposed many
new requirements on the states including programs for source water assessment, operator
certification and training, and compliance capacity development. The amendments also
required that community water suppliers provide customers with annual “consumer
confidence reports” that provide information on contaminants found in the local drinking
water. Congress authorized appropriations for SDWA programs through FY2003.
Regulated Public Water Systems
Federal drinking water regulations apply to some161,000 privately and publicly owned
water systems that provide piped water for human consumption to at least 15 service
connections or that regularly serve at least 25 people. (The law does not apply to private,
residential wells.) Of these systems, roughly 53,400 are community water systems (CWSs)
that serve a residential population of nearly 270 million year-round. All federal regulations
apply to these systems. (Roughly 15% of community systems are investor-owned.) Nearly
18,700 public water systems are non-transient, non-community water systems (NTNCWSs),
such as schools or factories, that have their own water supply and serve the same people for
more than 6 months but not year-round. Most drinking water requirements apply to these
systems. Another 89,000 systems are transient non-community water systems (TNCWSs)
(e.g., campgrounds and gas stations) that provide their own water to transitory customers.
TNCWSs generally are required to comply only with regulations for contaminants that pose
immediate health risks (such as microbial contaminants), with the proviso that systems that
use surface water sources must also comply with filtration and disinfection regulations.
Of the community water systems, roughly 84% serve 3,300 or fewer people. While large
in number, these systems provide water to just 10% of the population served by all
community systems. In contrast, 7% of community water systems serve more than 10,000
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people, and they provide water to 81% of the population served. Fully 85% (15,900) of non-
transient, non-community water systems and 97% (86,400) of transient noncommunity water
systems serve 500 or fewer people. These statistics give some insight into the scope of
financial, technological, and managerial challenges many public water systems face in
meeting a growing number of complex federal drinking water regulations. Table 1 provides
statistics for community water systems.
Table 1. Size Categories of Community Water Systems
System size
Number of
Population
Percent of
Percent of
(population served)
Community
Served
Community
Population
Water Systems
(millions)
Water Systems
Served
Very small (25-500)
30,703
5.0
57%
2%
Small (501-3,300)
14,331
20.2
27%
8%
Medium (3,301-10,000)
4,606
26.7
9%
10%
Large (10,001-100,000)
3,436
96.3
6%
36%
Very large (>100,000)
361
119.5
1%
45%
Total
53,437
267.7
100%
100%
Adapted from: US Environmental Protection Agency. Factoids: Drinking Water and Ground Water Statistics for 2002.
Available at Internet website: [http://www.epa.gov/safewater/data/pdfs/02factoids.pdf].
Regulating Drinking Water Contaminants
The Safe Drinking Water Act directs EPA to promulgate National Primary Drinking
Water Regulations for contaminants that may pose public health risks and that are likely to
be present in public water supplies. These regulations generally include numerical standards
to limit the amount of a contaminant that may be present in drinking water. Where it is not
economically and technically feasible to measure a contaminant at very low concentrations,
EPA establishes a treatment technique in lieu of a standard.
To develop a drinking water regulation, EPA engages in a technical assessment of a
variety of factors. The Agency must: 1) determine the occurrence of a contaminant in the
environment, and especially in public water systems; 2) evaluate human exposure and risks
of adverse health effects to the general population and to sensitive subpopulations; 3) ensure
that analytical methods are available for water systems to use in monitoring for a
contaminant; 4) evaluate the availability and costs of treatment techniques that can be used
to remove a contaminant; and 5) assess the impacts of a regulation on public water systems,
the economy, and public health. Consequently, regulation development typically is a multi-
year process. However, EPA may expedite procedures and issue interim standards to respond
to urgent threats to public health.
After reviewing health effects studies, EPA sets a nonenforceable maximum
contaminant level goal (MCLG) at a level at which no known or anticipated adverse health
effects occur and that allows an adequate margin of safety. EPA also considers the risk to
sensitive subpopulations (e.g., children). For carcinogens and microbes, EPA sets the MCLG
at zero. Because MCLGs consider only health effects and not analytical detection limits or
treatment technologies, they may be set at levels that water systems cannot meet. Once the
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MCLG is established, EPA sets an enforceable standard, the maximum contaminant level
(MCL). The MCL generally must be set as close to the MCLG as is “feasible” using the best
technology or other means available, taking costs into consideration.
EPA has relied on legislative history to determine the meaning of “feasible.” Most
recently, the Senate report accompanying the 1996 amendments stated that feasible means
the level that can be reached by large, regional drinking water systems applying best
available treatment technology. The report explained that this approach is used because 80%
of the population receives its drinking water from large community water systems, and thus,
safe water can be provided to most of the population at very affordable costs. (About 80%
of the population is served by systems that serve a population of 10,000 or more.)
However, because standards are based on cost considerations for large systems,
Congress expected that standards could be less affordable for smaller systems. An issue in
the 1996 reauthorization debate concerned whether the costs of some standards were
justified, given their estimated risk-reduction benefits. As amended, the Act now requires
EPA, when proposing a standard, to publish a determination as to whether or not the benefits
of a proposed standard justify the costs. If EPA determines that the benefits do not justify the
costs, EPA, in certain cases, may promulgate a standard less stringent than the feasible level
that “maximizes health risk reduction benefits at a cost that is justified by the benefits.” EPA
used this flexibility when revising the arsenic standard in 2001.
Recent rulemaking activities include a 1998 rule package that expanded requirements
to control microbial pathogens (e.g., Cryptosporidium) and disinfectants and disinfection
byproducts (e.g., chlorine and bromate). These requirements are now in effect for relevant
water systems. EPA also issued new regulations for several radionuclides, including radium
(effective December 2003), and a revised standard for arsenic (effective January 2006).
During FY2004, EPA expects to complete several related rulemakings, including: a
groundwater rule to establish disinfection requirements for systems relying on ground water
(this rule is intended to protect against fecal bacteria contamination in these systems); and
a rule package that includes the Stage 2 Disinfectants and Disinfection Byproduct Rule
(required by the 1996 amendments) and the Long Term Enhanced Surface Water Treatment
Rule. These rules build on the rules issued in 1998 to strengthen public health protection
from disinfectants, their byproducts, and pathogens. EPA also is working to issue a final
radon rule that was due in 2001. Ongoing work on this rulemaking includes re-evaluating the
rule’s cost and benefits to address a General Accounting Office report, Revisions to EPA’s
Cost Analysis for the Radon Rule Would Improve Its Credibility and Usefulness (GAO-02-
333), which concluded that EPA had underestimated compliance costs by 20%.
Many other contaminants are being studied for possible regulation, including MTBE
and perchlorate. EPA identified these contaminants as candidates for regulation in 1998, but
concluded that information was insufficient at that time to make a regulatory determination.
EPA listed MTBE and perchlorate as priorities for further research on health effects and
treatment technologies, and as priorities for collecting occurrence data. In 2002, EPA issued
a draft risk assessment for perchlorate. In March 2003, EPA and other agencies requested the
National Academies of Science to advise EPA on questions related to that assessment.
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Issues in the 108th Congress
An array of drinking water issues could receive attention in the 108th Congress. Current
issues involve drinking water infrastructure needs and funding; the status of efforts to
enhance the security of public water supplies; small system compliance capacity; and efforts
to address contamination of public water supplies by unregulated contaminants, such as
MTBE and perchlorate. Other issues that may receive attention include how the states are
faring in their efforts to implement SDWA provisions, particularly the many requirements
added by the 1996 SDWA amendments. Although authorizations of appropriations for most
SDWA programs expire in FY2003, a comprehensive reauthorization bill is not expected.
As with other EPA-administered statutes having expired funding authority, the programs do
not expire as long as Congress continues to appropriate funds for these programs.
Drinking Water Infrastructure Funding
Drinking Water State Revolving Fund. A persistent SDWA issue concerns the
ability of public water systems to upgrade or replace infrastructure to comply with federal
drinking water regulations and, more broadly, to ensure the provision of a safe and reliable
water supply. In 1996, Congress responded to growing complaints about the Act’s unfunded
mandates and authorized a drinking water state revolving loan fund (DWSRF) program to
help public water systems finance infrastructure projects needed to meet drinking water
standards and to address the most serious health risks. The Act authorizes EPA to award
annual capitalization grants to the states. States then use their grants (plus a 20% state match)
to provide loans and other assistance to public water systems. Communities repay loans into
the revolving fund, thereby making resources available for projects in other communities.
The DWSRF program is modeled after a similar program in the Clean Water Act.
Eligible projects include installation and replacement of treatment facilities, distribution
systems, and certain storage facilities. Projects to replace aging infrastructure are eligible if
they are needed to maintain compliance or to further public health protection goals. Funds
may not be used for operation and maintenance of water systems. Eligible systems include
publicly and privately owned community water systems and not-for-profit noncommunity
water systems; however some states have laws or policies that preclude privately owned
utilities from receiving DWSRF assistance. (For more information, see CRS Report 97-677,
Safe Drinking Water Act: State Revolving Fund Program.)
Congress authorized appropriations totaling $9.6 billion, including $1 billion for each
of FY1995 through FY2003 for the DWSRF program. Since the program was first funded
in FY1997, Congress has appropriated roughly $6.1 billion, including $850 million for
FY2003 in P.L. 108-7 (roughly $844 million after applying the across the board reduction
required by that law). The President has requested $850 million for FY2004.
All states are participating in the program and, through June 2002, they had received
a total of $4.4 billion in capitalization grants. This amount, combined with the state match,
bond proceeds, and other funds, provided a total of $6.7 billion in DWSRF funds available
for providing loans and other assistance. Through June 30, 2002, states had made more than
2,400 loans totaling $5.1 billion, and $1.6 billion remained available for loans.
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Funding needs and issues. While the DWSRF program generally is well regarded,
many organizations and state and local officials argue that greater investment in drinking
water infrastructure is required. EPA’s 1999 survey of capital improvement needs for public
water systems indicated that communities need to invest roughly $150.9 billion on drinking
water infrastructure improvements over 20 years (1999-2018) to comply with existing
drinking water regulations and to ensure the provision of safe water. The survey excluded
funds needed for compliance with several recent regulations (including the revised arsenic
and radium rules) and pending rules for radon and other contaminants; nor did it consider
funds needed for security upgrades. These requirements are expected to substantially increase
needs estimates.
A related issue is the need for communities to address drinking water infrastructure
needs that are outside the scope of the DWSRF program and, thus, generally are ineligible
for assistance from this source. Ineligible categories include future growth, ongoing
rehabilitation, and operation and maintenance of systems. According to EPA, outdated and
deteriorated drinking water infrastructure poses a fundamental long-term threat to drinking
water safety, and in many communities, basic infrastructure costs could far exceed SDWA
compliance costs. (Several other federal programs provide funding for water infrastructure
projects. For a discussion of these programs, see CRS Report RL30478, Federally Supported
Water Supply and Wastewater Treatment Programs.)
In September 2002, EPA issued The Clean Water And Drinking Water Infrastructure
Gap Analysis, which identified potential funding gaps between projected needs and spending
from 2000 through 2019. This analysis estimated the potential 20-year funding gap for
drinking water and wastewater infrastructure capital and operations and maintenance
(O&M), based on two scenarios: a “no revenue growth” scenario and a “revenue growth”
scenario that assumed spending on infrastructure would increase 3% per year. Under the “no
revenue growth” scenario, EPA projected a funding gap for drinking water capital investment
of $102 billion (roughly $5 billion per year) and an O&M funding gap of $161 billion ($8
billion per year). Using revenue growth assumptions, EPA estimated a 20-year capital
funding gap of $45 billion ($2 billion per year), and no gap for O&M.
Other needs assessments also reveal a funding gap. A recent study by the Congressional
Budget Office, Future Investment in Drinking Water and Wastewater Infrastructure,
concluded that current funding from all levels of government, combined with current
revenues from ratepayers, will not be sufficient to meet the nation’s future demand for water
infrastructure. In 2000, the Water Infrastructure Network (WIN) (a coalition of state and
local officials, water and wastewater service providers, environmental groups and others)
issued a report concluding that, over the next 20 years, water and wastewater systems need
to invest $23 billion annually more than current investments to meet SDWA and Clean
Water Act health and environmental priorities and to replace aging infrastructure. In the 107th
Congress, WIN and other groups presented proposals to Congress for a multi-billion dollar
investment program in water infrastructure. Others, however, called for more financial self-
reliance within the water sector. (For information on wastewater infrastructure funding, see
CRS Issue Brief IB10108, Clean Water Act Issues in the 108th Congress.)
The President’s budget request for FY2004 addresses EPA’s Gap Analysis. In addition
to requesting $850 million for the DWSRF program for FY2004, the President proposes that
funding be continued at a level of $850 million annually through FY2018. According to
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EPA’s budget justification, the extension of federal support would allow DWSRFs to revolve
at a cumulative level of $1.2 billion (more than double the previous goal of $500 million)
and would help close the funding gap for drinking water infrastructure capital needs.
Given the large estimated needs and federal budget constraints, EPA, states, localities,
and water utilities have been examining alternative management and financing strategies to
address water system costs. Approaches being considered include establishing public-private
partnerships (privatization options range from contracting for services to selling system
assets), improving asset management, and adopting full-cost pricing for water services.
The CBO’s water infrastructure report shows that U.S. household water bills are lower
than those in most other industrialized nations, and some stakeholders maintain that water
systems should rely primarily on rate increases to meet infrastructure needs. However, most
stakeholders agree that not all households can afford rate increases. One assistance option
receiving attention is to provide subsidies to low-income households that face high water
bills. Such an approach is used to reduce home heating costs under the federal Low Income
Home Energy Assistance Program. Proponents argue that, with this approach, subsidies
could be targeted where needed rather than broadly subsidizing water infrastructure that
traditionally has been a local responsibility. Others argue that SDWA’s mandates justify a
broader federal funding role that could be supplemented by a low-income subsidy program.
During the 107th Congress, several hearings were held on water infrastructure funding
issues, including a hearing on innovative financing techniques for water infrastructure
improvements, offered by the Senate Environment and Public Works Committee. This
Committee also reported a water infrastructure financing bill, S. 1961 (S.Rept. 107-228), that
proposed to increase funding authority for the drinking water and Clean Water Act SRF
programs and to establish a $5 billion grant program for small water systems. The legislation
also included provisions aimed at improving the management of water systems. However,
the bill became bogged down after a number of contentious amendments were adopted in
markup, including an amendment to apply Davis-Bacon prevailing wage requirements to all
construction projects financed in any part with assistance under SDWA, including funds
derived from DWSRF loan repayments. (See CRS Report RL31344, Water Infrastructure
Financing Legislation: Comparison of S. 1961 and H.R. 3930.)
Drinking water infrastructure financing and related compliance capacity issues may
continue to be of interest in the 108th Congress. (Small system compliance issues are
discussed below.) An economic stimulus bill (S. 396) has been introduced that, among other
purposes, would increase funding authority for the DWSRF program. Other drinking water
infrastructure funding bills are likely as well. However, in the current environment of tight
budgets and multiple priorities, questions concerning the appropriate federal role in funding
water infrastructure could receive renewed attention. Authorizing committees have expressed
interest in exploring innovative approaches for financing water infrastructure projects and
improving water system management as a means of helping communities address the wide
array of infrastructure needs.
Drinking Water Security
The events of September 11, 2001, raised concerns about the security of the nation’s
water supplies and their vulnerability to attack. The 107th Congress addressed drinking water
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security issues in the Public Health Security and Bioterrorism Preparedness and Response
Act of 2002 (P.L. 107-188, H.Rept. 107-481), which amended SDWA to require community
water systems to conduct vulnerability assessments and prepare emergency response plans.
The 108th Congress may be interested in overseeing the implementation of these provisions
and other efforts to improve water security. Congressional attention could focus on several
issues, such as: 1) what are the roles of EPA and states in overseeing and facilitating
implementation of the security requirements by water utilities; 2) what is the relationship
between EPA and Department of Homeland Security regarding drinking water vulnerability
assessments and other critical infrastructure information; and 3) what additional funding is
needed to meet the new mandates, and from what source(s) might that funding come?
Title IV of the Bioterrorism Preparedness Act made several amendments to the SDWA.
A key provision requires each community water system serving more than 3,300 individuals
to conduct an assessment of the system’s vulnerability to terrorist attacks or other intentional
acts to disrupt the provision of a safe and reliable drinking water supply. These systems must
certify to EPA that they have conducted a vulnerability assessment and submit a copy of the
assessment to EPA. The Act also requires these systems to prepare or revise emergency
response plans incorporating the results of the vulnerability assessments no later than 6
months after completing them. Table 2 outlines the schedule for water utilities to submit
vulnerability assessments to EPA and to complete emergency response plans.
Table 2. Community Water System Deadlines under the
Bioterrorism Act
System size by population
Vulnerability assessments
Emergency response plans
served
must be completed
must be completed
(approx. no. of systems)
100,000 or more
March 31, 2003
September 30, 2003
(425)
50,000 - 99,999
December 31, 2003
June 30, 2004
(460)
3,301 - 49,999
June 30, 2004
December 31, 2004
(7,500)
The Bioterrorism Act authorized $160 million for FY2002 (and sums as may be needed
for FY2003 through FY2005) to provide financial assistance to community water systems
to assess vulnerabilities, prepare response plans, and address security enhancements and
significant threats. The emergency supplemental appropriations for FY2002 (P.L. 107-117)
provided $90 million for assessing the vulnerabilities of drinking water utilities and other
security planning, and $5 million for state grants for assessing drinking water safety.
In FY2002, EPA awarded approximately $51 million in water security grants to help
the largest public water systems complete vulnerability assessments by the March 31, 2003
date. Congressional committees may be interested in overseeing the outcome of this first
drinking water deadline under the Bioterrorism Act, both in terms of the quantity and quality
of assessments completed.
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Vulnerability assessments for the second category of systems (serving between 50,000
and 100,000) are due December 31, 2003.Whether similar funding will be provided for these
and the smaller systems that are required to prepare vulnerability assessments remains an
issue. Also at issue is what assistance might be available for the remaining 84% of
community water systems that serve 3,300 or fewer and are not required to do assessments
and emergency planning under the Bioterrorism Act. EPA, states, and drinking water
organizations have developed guidance documents and are providing technical assistance to
these smaller systems.
For FY2003, EPA requested $16.9 million to conduct vulnerability assessments for
small and medium-sized systems and another $5 million for state water security coordinators
to work with EPA and drinking water utilities in assessing drinking water safety. The
Consolidated Appropriations Resolution for FY2003 (P.L. 108-7) provided this amount. It
also contained several earmarks, including $2 million for the National Rural Water
Association to help small systems conduct vulnerability assessments, and $1 million to the
American Water Works Association to provide drinking water security training.
For FY2004, EPA has requested $32.4 million for critical water infrastructure
protection, including $5 million for state grants for water security efforts. EPA’s budget
request explains that this funding supports states’ efforts to work with drinking water and
wastewater systems to develop and enhance emergency operations plans; conduct training
in the implementation of remedial plans in small systems; and develop detection, monitoring
and treatment technology to enhance drinking water and wastewater security. EPA proposes
to use the requested funds to assist the roughly 8,000 community water systems that serve
water to populations between 3,300 and 100,000. As noted in Table 2, the Bioterrorism Act
requires these systems to prepare vulnerability assessments and emergency response plans
during the next two years. (For more information, see CRS Report RL31294, Safeguarding
the Nation’s Drinking Water: EPA and Congressional Actions.)
Small Systems Issues
A key SDWA implementation issue involves the financial, technical, and managerial
capacity of small communities to comply with a growing number of complex drinking water
regulations. As noted above, nearly 84% (45,000 of 53,400) of the nation’s community
water systems are small, serving 3,300 persons or fewer; 57% (30,700) of the systems are
very small, serving 500 persons or fewer. EPA and states have documented the difficulties
many small systems face in meeting SDWA rules, and more fundamentally, in ensuring the
quality of their water supplies. Major problems include: deteriorated infrastructure; lack of
access to capital; limited customer and rate base; inadequate rates; diseconomies of scale;
and limited technical and managerial capabilities. Although these systems serve just 10% of
the population served by community water systems, the sheer number of small systems
creates challenges for policymakers.
In the earliest SDWA debates, Congress recognized that setting standards based on
technologies that are affordable for large cities could pose problems for small systems. As
EPA attempted to implement the 1986 requirement that the Agency issue 25 new standards
every 3 years, it became increasingly clear that small systems especially were having
difficulty keeping up with the growing number of regulations. During the reauthorization
debate leading up to the 1996 amendments, policymakers gave considerable attention to the
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question of how to help small systems develop or improve their capacity to ensure consistent
compliance with the SDWA. The 1996 amendments added provisions aimed at achieving
this goal, including a requirement that states establish strategies to assist systems in
developing and maintaining the technical, financial and managerial capacity to meet SDWA
regulations. Congress also revised provisions on standard-setting, variances, and exemptions
to increase consideration of small system concerns, and to provide some compliance
flexibility in certain cases.
Small system variances. The SDWA now requires EPA, when issuing a regulation,
to identify technologies that meet the standard and that are affordable for systems that serve
populations of 10,000 or fewer. If EPA does not identify “compliance” technologies that are
affordable for these systems, then EPA must identify small system “variance” technologies.
A variance technology need not meet the standard, but must protect public health. States may
grant variances to systems serving 3,300 persons or fewer, if a system cannot afford to
comply with a rule (through treatment, an alternative source of water, or other restructuring)
and the system installs a variance technology. With EPA approval, states also may grant
variances to systems serving between 3,300 and 10,000 people.
To date, EPA has determined that affordable compliance technologies are available for
all drinking water regulations. Consequently, the Agency has not identified any small system
variance technologies, and no small system variances are available. If EPA had identified
variance technologies, states still might not make much use of these variances for a number
of reasons – a key issue being the existence of a double standard for tap water quality in
communities that meet a standard, compared with those that would rely on variances.
Exemptions. The Act’s exemption provisions also are intended to provide compliance
flexibility in limited circumstances. States or EPA may grant temporary exemptions from a
standard if, due to certain compelling factors (including cost), a system cannot comply on
time. For example, all systems are required to comply with the new arsenic standard 5 years
after its promulgation date. An exemption would allow 3 more years for qualified systems.
Small systems (serving 3,300 persons or fewer) may be eligible for up to 3 additional 2-year
extensions, for a total exemption duration of 9 years (for a total of up to 14 years to achieve
compliance). In the preamble to the arsenic rule published in January 2001, EPA noted that
exemptions will be an important tool to help states address the number of systems needing
financial assistance to comply with this rule and other SDWA rules (66 FR 6988).
Compliance and affordability issues. Concern over the affordability of SDWA
standards, especially for small communities, reached new levels with the promulgation of
the new arsenic rule. The rule tightened the arsenic standard from 50 to 10 parts per billion
in response to new health effects information; however, EPA's and other analyses indicated
that compliance costs could be high for households served by small systems.
Prompted by intense debate over the revised arsenic standard, its potential cost to small
communities, and its delay by EPA for further scientific review, the conference report for
EPA’s FY2002 appropriations (H.Rept. 107-272) prohibited EPA from using funds to delay
the arsenic rule, but also directed EPA to review its affordability criteria and how small
system variance and exemption programs should be implemented for arsenic. The conferees
urged EPA to recommend procedures to grant more time for small communities in cases
where compliance by 2006 poses an undue economic hardship. EPA was required to report
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to Congress on a review of its affordability criteria, administrative actions, potential funding
mechanisms for small community compliance, and possible legislative actions.
EPA’s report to Congress, Small Systems Arsenic Implementation Issues, discusses the
major actions the Agency is taking regarding its affordability criteria for drinking water
regulations and small systems issues associated with implementing the new arsenic standard.
These activities include 1) reviewing the small system affordability criteria and variance
process; 2) developing a small community drinking water assistance plan to improve access
to financial and technical assistance, improve compliance capacity, and simplify the use of
exemptions; and 3) implementing a $20 million research and technical assistance strategy.
In August 2002, EPA issued guidance on exemptions and the arsenic rule. In May 2003, the
drinking water advisory council is expected to make recommendations to EPA for revising
its current process for evaluating the affordability of standards for small systems.
Congress may be interested in overseeing EPA’s efforts to address this congressional
directive, and small system compliance capacity issues, in general. In the 107th Congress,
various bills were introduced to assist small systems to comply with SDWA regulations,
especially the new arsenic rule. Several bills proposed new grant programs for small systems.
S. 1961, the water infrastructure financing bill reported last year by the Senate Committee
on Environment and Public Works, addressed both funding and capacity development. Such
a legislative approach could continue to be of interest in this Congress.
State Administration of the Drinking Water Program
The states play a central role in administering the federal drinking water program, and
the success of the program depends substantially on them. All states, except Wyoming, have
been delegated primary enforcement authority (or primacy) for implementing SDWA
program requirements for public water systems, which they do through the Public Water
Supply Supervision (PWSS) program. State PWSS responsibilities grew markedly with the
1996 amendments and cover many areas, including public water system compliance
monitoring and enforcement, source water assessment, technical assistance and training, and
operator certification. States also are involved in security and emergency planning efforts.
State drinking water officials have expressed concern that while their responsibilities
have grown, federal funding to support these efforts has not kept pace. According to the
Association of State Drinking Water Administrators (ASDWA), comprised of state officials
responsible for administering federal and state drinking water programs, funds available in
2002 covered only 53% of program needs. ASDWA estimates that available funding will
cover only 42% of program needs by 2006. In dollar amounts, states project that the resource
gap will increase from $282 million in 2003 to $385 million in 2006.
The findings of a General Accounting Office (GAO) report generally are in agreement
with the state concerns. In 2000, GAO reported that the gap between the resources available
and the resources needed for state programs threatens to undermine states’ ability to
effectively implement and oversee SDWA requirements. More than 90% of states surveyed
by GAO predicted that staffing levels would be inadequate in the future as a number of new
program requirements and complex contaminant regulations take effect. The GAO calculated
that states have provided roughly 53% of the amount expended on implementing the drinking
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water programs. (General Accounting Office, Drinking Water: Spending Constraints Could
Affect States’ Ability to Implement Increasing Program Requirements, GAO/RCED-00-199.)
The SDWA authorizes $100 million annually for EPA to make grants to states to
administer the PWSS program. From FY1997 through FY2003, funding for state PWSS
grants has remained level at $87.3 million. (Congress provided a total of $93 million for
grants each year, with the remainder going to support Tribal drinking water programs). For
FY2004, the President has requested $105.1 million for PWSS grants to enhance state and
Tribal capacity to assist systems in implementing high priority regulations.
To supplement the PWSS grants, states may set aside part of their drinking water state
revolving fund allotment. States may use 4% of their allotment to cover the costs of
administering DWSRF programs. Additionally, if a state provides a dollar-for-dollar match,
another 10% of the DWSRF grant may be used for several purposes, including administering
the PWSS program, providing technical assistance through source water protection
programs, and implementing the capacity development and operator certification programs.
An additional 2% can be used for providing technical assistance to small systems. The GAO
noted that if states had made full use of the DWSRF set-asides, then EPA’s requested
appropriations, combined with the required state matching funds, would have exceeded
ASDWA needs estimates for FY2002. However, states generally have not set aside the
maximum amount, partly because doing so would divert funds from needed infrastructure
projects. Also, because of state budget cuts, an increasing number of states cannot meet the
matching fund requirements for these set-asides. In testimony before the House
Appropriations Subcommittee on VA, HUD and Independent Agencies on April 9, 2003,
ASDWA requested that Congress amend the Act to eliminate the dollar-for-dollar match
requirements for states to use the 10% set-aside for program implementation activities.
Methyl Tertiary Butyl Ether (MTBE)
An issue that has received attention since the 104th Congress concerns the contamination
of drinking water by MTBE. For technical and cost reasons, this gasoline additive has been
widely used to meet the Clean Air Act requirement that reformulated gasoline (RFG) contain
at least 2% oxygen to improve combustion. RFG is required for use in areas that fail to meet
the federal ozone standard. However, numerous incidents of drinking water contamination
by MTBE in recent years have led to calls for restrictions on its use. Seventeen states,
including California and New York, have enacted limits or phase-outs of the additive.
The primary source of MTBE in drinking water has been petroleum releases from
leaking underground storage tank (UST) systems. Once released, MTBE moves through soil
and into water more rapidly than other gasoline components, thus making it is more difficult
and costly to clean up than conventional gasoline leaks. Although MTBE is considered to
be less toxic than some other gasoline components (such as benzene), even small amounts
of MTBE can render water undrinkable because of its strong taste and odor. These
characteristics have made MTBE use an important issue for public water suppliers.
In 1997, EPA issued a drinking water advisory for MTBE based on consumer
acceptability (for taste and smell). EPA issues drinking water advisories to provide
information on contaminants in drinking water that have not been regulated under SDWA.
Advisories are not enforceable, but provide guidance to water suppliers and other interested
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parties regarding potential health effects or consumer acceptability. While the MTBE
advisory is not based on health effects, EPA stated in the advisory that keeping MTBE levels
in the range of 20-40 micrograms per liter (:g/L) or lower for consumer acceptability reasons
would also provide a large margin of safety from potential adverse health effects.
EPA also has taken steps that could lead to the development of an enforceable drinking
water standard for MTBE. In 1998, EPA included MTBE on a list of contaminants that are
potential candidates for regulation. Compounds on the contaminant candidate list (CCL) are
categorized as regulatory determination priorities, research priorities, or occurrence priorities.
Because of data gaps on health effects and occurrence, EPA placed MTBE in the category
of contaminants for which further occurrence data collection and health effects research are
priorities. Thus, although EPA has not selected MTBE for regulation, the Agency is pursuing
research to fill the existing data gaps so that a regulatory determination may be made. The
next round of determinations is scheduled for 2006, although EPA can make determinations
outside of this cycle. At least 7 states have set a health-based drinking water standard for
MTBE, and at least 5 states have adopted a secondary standard (based on taste or odor).
The 108th Congress has acted on several bills that address MTBE concerns. On May 1,
2003, the Senate passed S. 195, the Underground Storage Tank Compliance Act of 2003
(S.Rept. 108-13), which is equivalent to S. 1850 from the 107th Congress. This bill authorizes
appropriations from the Leaking Underground Storage Tank (LUST) Trust Fund for cleaning
up MTBE contamination and adds new leak prevention requirements to the federal
underground storage tank regulatory program. In testimony on S. 1850 before the Senate
Environment and Public Works Committee in May 2002, the EPA witness did not offer an
official Administration position on this legislation.
On April 11, the House passed H.R. 6, a broad energy bill, that authorizes the use of
$850 million from the LUST Trust Fund for responding to releases of fuels containing
oxygenates (e.g., MTBE, other ethers, and ethanol). H.R. 6 eliminates the oxygen content
requirement for RFG, which prompted the increased use of MTBE, and promotes the use of
renewable fuels. It provides a “safe harbor” prohibiting products liability lawsuits, alleging
manufacturing or design defects, against producers of fuels containing MTBE and renewable
fuels, such as ethanol. The bill states that the safe harbor may not be construed to affect
liability for remediation costs, drinking water contamination, or negligence. However, with
liability for manufacturing and design defects ruled out, plaintiffs would have to demonstrate
negligence in the handling of such fuels, a more difficult legal standard to meet.
Consequently, public water suppliers widely oppose the safe harbor provision and have
expressed concern that it could leave communities paying much of the cost for cleaning up
contamination by fuels containing MTBE or ethanol. Manufacturers argue that a safe harbor
provision is reasonable, given that the fuels are used to meet federal fuel mandates. (For
further discussion, see the House Energy and Commerce Committee report, H.Rept. 108-65.)
On June 3, the Senate Environment and Public Works Committee reported S. 791 (S.Rept.
108-57), which bans MTBE, promotes the use of renewable fuels, and contains a product
liability safe harbor for renewable fuels, but not MTBE. S. 791 authorizes the use of $200
million from the Trust Fund for remediating contamination from releases of ether fuel
additives and authorizes other funding for enforcing UST leak prevention requirements. The
bill states that the contamination need not be from USTs to be eligible for cleanup funding.
On June 6, the text of S. 791 was added as an amendment to the Senate energy bill, S. 14.
Other bills include H.R. 1122, which authorizes the use of $200 million from the Trust Fund
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for cleaning up MTBE contamination. (For more information, see CRS Report RS21201,
Leaking Underground Storage Tanks: Program Status and Issues.)
LEGISLATION
H.R. 306 (Gary Miller)
Amends SDWA to provide procedures for claims relating to drinking water; protects
drinking water suppliers against lawsuits where utilities are in compliance with drinking
water regulations; establishes guidelines for suits involving contaminants that are not
regulated under SDWA. Introduced Jan. 8, 2003; referred to Committee on Energy and
Commerce and to the Committee on the Judiciary.
H.R. 396 (DeFazio)
The Emergency Anti-Recession Act of 2003 provides tax relief, unemployment
assistance, and state and local government assistance, and creates jobs through infrastructure
investment. Amends SDWA to authorize an additional $2.5 billion for the DWSRF program
for FY2002. Introduced March 3, 2003; referred to seven committees.
H.R. 1471 (Engel)
Amends SDWA to allow systems to avoid filtration requirements in certain instances.
Introduced March 27, 2003; referred to Committee on Energy and Commerce.
H.R. 1588 (Hunter)/S. 1050 (Warner)
The House and Senate- passed versions of the DOD authorization Act of FY2004 call
for an epidemiological study of exposure to perchlorate in drinking water. The Senate-passed
bill also directs DOD to survey perchlorate contamination at DOD sites. Passed by the House
on May 22, 2003; passed by the Senate (substituting text of S. 1050) on June 4, 2003.
H.R. 2123 (Capps)
Amends SDWA to require EPA to promulgate a drinking water standard for perchlorate
by July 1, 2004. Amends the Clean Water Act to prevent pollution by perchlorate by
requiring notification of perchlorate discharges, establishing penalties for such discharges,
and establishing the Perchlorate Pollution Prevention Fund to be supported by the penalties.
Directs EPA to carry out a loan program to help water suppliers and private well owners to
acquire or provide water that meets state and federal perchlorate drinking water standards.
Introduced May 15, 2003; referred to Committee on Energy and Commerce.
S. 87 (Clinton)
The Homeland Security Block Grant Act of 2003 authorizes the Secretary of the
Department of Homeland Security to make grants to state and local governments and Indian
tribes for security enhancing activities, including improving cyber and infrastructure security
by improving the security for water treatment plants, distribution systems, and other water
infrastructure. Introduced Jan. 7, 2003; referred to Committee on Governmental Affairs.
S. 502 (Boxer)
Amends SDWA to require EPA to promulgate a drinking water standard for perchlorate
by July 1, 2004. Introduced March 3, 2003; referred to Committee on Environment and
Public Works.
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CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
U.S. Congress. House. Committee on Energy and Commerce. Subcommittee on
Environment and Hazardous Materials. Drinking Water Needs and Infrastructure.
Hearing, Apr. 11, 2002. 107th Congress, 2nd session. 108 p. (107-107)
---- Drinking Water Needs and Infrastructure. Hearing, Mar. 28, 2001. 107th Congress, 1st
session. 180 p. (107-59)
U.S. Congress. House. Committee on Transportation and Infrastructure. Subcommittee on
Water Resources and Environment. Water Infrastructure Needs. Hearing, Mar. 28,
2001. 107th Congress, 1st session. 178 p. (107-8)
U.S. Senate. Committee on Environment and Public Works. Water Investment Act of 2002.
Report to accompany S. 1961. July 29, 2002. Report 107-228. 116 p.
---- Water and Wastewater Infrastructure Needs. Hearing, Mar. 27, 2001. 107th Congress,
1st session. 141 p. (107-316)
FOR ADDITIONAL READING
National Academy of Sciences. Privatization of Water Services in the United States: An
Assessment of Issues and Experience. National Research Council. National Academy
Press. Washington D.C. 2002. 164 p.
U.S. Congressional Budget Office. Future Investment in Drinking Water and Wastewater
Infrastructure. November 2002. 58 p.
U.S. Environmental Protection Agency. Providing Safe Drinking Water in America: 2000
National Public Water Systems Compliance Report. Office of Enforcement and
Compliance Assurance. Report No. EPA 305-R-02-001. July 2002. 98 p.
[http://www.epa.gov/Compliance/resources/reports/assistance/sdwcom2002.pdf]
---- The Clean Water and Drinking Water Infrastructure Gap Analysis Report. Office of
Water. Report No. EPA 816-R-02-020. September 2002. 50 p.
[http://www.epa.gov/safewater/gapreport.pdf]
---- Small System Arsenic Implementation Issues, Report to Congress. EPA 815-R-02-003.
March 2002. 20 p.
[http://www.epa.gov/safewater/arsenic.html]
U.S. General Accounting Office. Water Infrastructure: Information on Federal and State
Financial Assistance. GAO-01-134. November 2001. 46 p.
---- Water Infrastructure: Information on Financing, Capital Planning, and Privatization.
GAO-02-764. August 2002. 83 p.
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