Order Code IB10118
CRS Issue Brief for Congress
Received through the CRS Web
Safe Drinking Water Act:
Implementation and Issues
Updated December 8, 2004
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
Current Drinking Water Issues
Regulating Drinking Water Contaminants
Standard-Setting
Recent and Pending Rules
Perchlorate
Lead in Drinking Water
Methyl Tertiary Butyl Ether (MTBE)
Drinking Water Infrastructure Funding
Drinking Water State Revolving Fund
Funding Issues
Drinking Water Security
Small Systems Issues
Small System Variances
Exemptions
Compliance and Affordability Issues
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
and prepare emergency response plans. The
issues involved water infrastructure funding
108th Congress remained interested in this
and problems caused by specific contami-
issue, particularly through the oversight and
nants, such as the gasoline additive methyl
funding of water security efforts.
tertiary butyl ether (MTBE), perchlorate, and
lead in drinking water. Congress last reautho-
An ongoing SDWA issue involves the
rized the Safe Drinking Water Act (SDWA) in
growing cost of drinking water standards and
1996, and although funding authority for most
the availability of funding for infrastructure
SDWA programs expired in FY2003, broad
projects needed by public water systems, and
reauthorization efforts were not pursued as
especially small systems, to comply with
EPA, states, and water utilities continued
SDWA standards. Congress authorized a
implementing the 1996 amendments.
drinking water state revolving fund (DWSRF)

program in 1996 to help communities finance
Both chambers passed bills to address
projects needed to meet standards. For
MTBE contamination. The Senate passed S.
FY2005, Congress approved roughly $850
195, an underground storage tank leak preven-
million for the DWSRF program. However,
tion and cleanup bill. The House passed the
studies show that a large funding gap exists
conference report for H.R. 6, and passed H.R.
and will grow as SDWA requirements in-
4503; the two broad energy bills included
crease and infrastructure ages.
provisions similar to S. 195. Several bills
would have strengthened the regulation of
Concern over the costs of drinking water
lead in drinking water (H.R. 4268/S. 2377,
standards has merged with the larger debate
and S. 2550).
over the federal role in assisting communities
with financing drinking water infrastructure
In response to concerns about perchlorate
— an issue that has become more challenging
contamination of water, Congress required
in a time of tightened budgets. In the 108th
health studies of perchlorate in P.L. 108-136,
Congress, several bills were introduced to
the Department of Defense (DOD) Authoriza-
increase funding for water infrastructure
tion Act of FY2004, and directed DOD with
projects, with special emphasis on helping
EPA to study perchlorate groundwater pollu-
small systems. The Senate Environment and
tion in the Southwest in the DOD FY2004
Public Works Committee reported S. 2550, a
Appropriations Act (P.L. 108-87). The Na-
water infrastructure financing bill to increase
tional Defense Authorization Act for FY2005
funding for the DWSRF, provide more techni-
(P.L. 108-375) included a “Sense of Con-
cal assistance to small systems, and create a
gress” that DOD should develop a plan for
grant program for qualified systems. Other
remediating perchlorate contamination.
bills, including H.R. 3328, S. 1432, and S.
1732, would have authorized grant programs
Concerns over the security of the nation’s
to help small communities comply with
drinking water supplies were addressed by the
standards. H.R. 4717 and S. 2717 would have
107th Congress through the Bioterrorism
provided new regulatory flexibility for small
Preparedness Act (P.L. 107-188), which
water systems in certain instances.
amended SDWA to require community water
systems to conduct vulnerability assessments
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
In the Consolidated Appropriations Act for FY2004 (H.R. 4818, H.Rept. 108-792),
Congress provided $850 million for the drinking water state revolving fund (DWSRF)
program ($843 million, after applying a mandatory 0.8% across-the-board reduction).
Congress also provided $100.5 million for state public water system supervision grants,
$10.8 million for underground injection control grants, and $5 million for Drinking Water
Program State Homeland Security Coordination grants, all subject to the mandatory 0.8%
reduction. In addition, the conferees directed EPA to report, by August 2005, on the extent
to which communities will be impacted by the arsenic rule, and to propose compliance
alternatives and make recommendations to minimize compliance costs.
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 widely 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 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 (PWSS)
Program remains the basic program for regulating public water systems, and EPA has
delegated primacy for this program to all states, except Wyoming and the District of
Columbia (which is defined as a state under SDWA); EPA has responsibility for
implementing the PWSS program in these two jurisdictions. (See also 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 53,400 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
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
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violations of standards and treatment techniques. Moreover, monitoring and reporting
violations create uncertainty as to whether systems 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 and 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. The law 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 six 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 53,363 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
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
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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)
30,417
5.01
57%
2%
Small (501-3,300)
14,394
20.26
27%
7%
Medium (3,301-10,000)
4,686
27.20
9%
10%
Large (10,001-100,000)
3,505
98.71
7%
36%
Very large (>100,000)
361
122.15
1%
45%
Total
53,363
273.33
100%
100%
Adapted from: US Environmental Protection Agency. Factoids: Drinking Water and Ground Water Statistics for 2003.
Available at Internet website: [http://www.epa.gov/safewater/data/pdfs/factoids_2003.pdf].
Current Drinking Water Issues
Major drinking water issues involve infrastructure funding needs; the security of water
supplies; small system capacity to comply with SDWA; and contamination of drinking water
by specific contaminants, including lead and the unregulated contaminants, MTBE and
perchlorate. Other issues include how the states are faring in their efforts to implement the
Act, particularly the provisions added by the 1996 amendments. Although appropriations
for most SDWA programs were authorized through FY2003, SDWA reauthorization was not
on the agenda in the 108th Congress. Rather, various bills were offered to address specific
issues, such as infrastructure funding and contamination by lead, MTBE, and perchlorate.
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.
Regulating Drinking Water Contaminants
Standard-Setting. 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 must address a variety of technical issues.
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
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health. Consequently, regulation development typically is a multi-year process. 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
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.”
Recent and Pending Rules. EPA’s recent rulemaking activities include a 1998 rule
package that expanded requirements to control pathogens, especially Cryptosporidium
(Interim Enhanced Surface Water Treatment Rule (SWTR)) and disinfectants (e.g., chlorine)
and their byproducts (e.g., chloroform) (Stage 1 Disinfectant and Disinfection Byproduct
Rule). In 2002, EPA issued the Long Term 1 Enhanced SWTR to improve control of
microbial pathogens among small systems. EPA also has issued new rules for several
radionuclides, including radium (now in effect), and a revised standard for arsenic that water
systems must comply with by January 2006.
EPA has nearly completed 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
(expected in July 2005) that includes the Stage 2 Disinfectants and Disinfection Byproduct
Rule and the Long Term 2 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 radon rule. EPA is evaluating
many other contaminants, including perchlorate and MTBE, for possible regulation.
Perchlorate. EPA identified perchlorate as a candidate for regulation in 1998, but
concluded that information was insufficient at that time to make a regulatory determination.
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EPA listed perchlorate as a priority for further research on health effects and treatment
technologies, and for collecting occurrence data. In 2002, EPA issued a controversial draft
risk assessment for perchlorate. In March 2003, EPA, the Department of Defense, and other
agencies requested the National Academies of Science (NAS) to advise EPA on questions
related to the risk assessment. The NAS study is expected to be completed soon.

The 108th Congress passed several perchlorate measures. The Department of Defense
Authorization Act of FY2004 (P.L. 108-136) required DOD to provide for health studies of
perchlorate in drinking water. The DOD FY2004 Appropriations Act (P.L. 108-87) directed
DOD, with EPA, to study perchlorate groundwater pollution that threatens drinking water
and irrigation supplies in the Southwest. The National Defense Authorization Act for
FY2005 (P.L. 108-375) included a “Sense of Congress” that DOD should: develop a plan for
remediating perchlorate contamination resulting from DOD activities to ensure DOD can
respond quickly once a federal drinking water standard is established; continue remediating
sites where perchlorate contamination poses an imminent and substantial endangerment to
human health and welfare; develop a plan to remediate contamination when the Secretary
determines that the contamination poses a health hazard; and continue evaluating sites, even
in the absence of an SDWA standard. Also, S. 2550 (S.Rept. 108-386), a water infrastructure
bill, would have required the U.S. Geological Survey to conduct a national survey of sites
contaminated with perchlorate. H.R. 2123, H.R. 5344, and S. 502 would have required EPA
to promulgate a drinking water regulation for perchlorate. (See also CRS Report RS21961,
Perchlorate Contamination of Drinking Water: Regulatory Issues and Legislative Actions.)
Lead in Drinking Water. Lead from various sources (including paint in older homes,
soil, and water) poses one of the main environmental threats to children’s health. In 2004,
the issue of lead contamination reemerged in Washington, D.C., where water monitoring
revealed marked increases in the levels of lead in tap water in recent years. The local water
authority’s limited response to the monitoring results severely damaged public trust in the
local water supply. These events led policy makers and EPA to examine the effectiveness
of the lead rule, particularly its monitoring and public notification requirements, as well as
compliance with the regulation. Hearings were held by the House Energy and Commerce
Committee (July 22, 2004), the House Government Reform Committee (March 5 and May
21, 2004), and the Senate Environment and Public Works Committee (April 7, 2004).
Lead Rule Overview. In 1991, EPA issued the Lead and Copper Rule (56 FR 26460)
to replace an interim lead regulation that included a standard of 50 parts per billion (ppb) that
was outdated and not protective of public health. Epidemiological research had shown that
adverse health effects from exposures to lead occur at lower levels and are worse than
previously thought, particularly for infants and children. (There is no known safe level of
exposure to lead, and recent studies suggest that very low levels of lead may adversely affect
children’s neurological development.) In 1988, EPA had proposed a regulation that would
have established an enforceable lead standard (maximum contaminant level (MCL)) of 5 ppb
applicable to water leaving the treatment plant and also would have required a treatment
technique (corrosion control) to further reduce lead in drinking water. Commenters on the
proposal expressed concern that a standard applicable at the treatment plant would not
indicate the amount of lead in tap water, and that compliance at the tap was essential. EPA
and utilities were concerned that an MCL applied at the tap would not be feasible because
lead in household plumbing could be a major cause of violations of a lead standard applied
at the tap — a situation beyond the control of the water system. This issue reflected the
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problem with regulating lead. Unlike most contaminants, lead is not normally present in
water as it leaves the treatment plant; rather, lead occurs in drinking water primarily as a
corrosion by-product, entering water as it travels through pipes in the distribution system and
in household plumbing. The primary sources of lead in drinking water are lead pipes, lead
solder that has been used in plumbing systems, and brass plumbing fixtures that contain lead.
The final Lead and Copper Rule (LCR) did not include an enforceable standard. Instead,
the LCR established a treatment technique (corrosion control) to prevent lead from leaching
into drinking water. The rule generally required all large water systems (serving more than
50,000 people) to conduct corrosion control studies and recommend an optimal corrosion
control treatment to the state (or to EPA in the case of Washington, D.C.). Smaller systems
were required to optimize corrosion control when monitoring showed that it was needed. The
state or EPA then approved or designated a treatment as optimal, and systems were given two
years to install corrosion control and one year to conduct followup monitoring. Optimizing
corrosion control is complex, and the “optimal” treatment can change as water characteristics
change and as utilities add new treatment processes to meet other drinking water regulations.
The LCR also established a lead “action level” of 15 ppb at the tap, based on the 90th
percentile level of water samples. Water systems are required to sample tap water in homes
and buildings that are at high risk of lead contamination. If lead concentrations exceed 15
ppb in more than 10% of taps sampled, the system is required, within 60 days, to inform
customers about lead’s health effects and sources, and what can be done to reduce exposure.
The system must continue to deliver educational materials as long as it exceeds the action
level. If the system continues to exceed the action level after installing optimal corrosion
control, it must replace 7% of the lead service lines under its ownership each year, and must
offer to replace the privately owned portion of a service line (at the owner’s expense).
Federal and Local Efforts. EPA, the D.C. Water and Sewer Authority (WASA),
and other local officials worked with the U.S. Army Corps of Engineers to determine the
cause of the elevated lead levels in the District of Columbia. (The Corps treats and supplies
water from the Washington Aqueduct to the District and several communities.) It appears
that changes in treatment processes, made by the Corps to comply with another EPA
regulation, made the water more corrosive, thus causing more lead to be leached from lead
pipes in the distribution system and from lead plumbing inside homes and other buildings.
In November 2000, the Corps changed the chemicals in its secondary disinfection treatment
from free chlorine to chloramines to comply with an EPA regulation that placed strict limits
on disinfection byproducts. Starting with the monitoring period, July 2001 through June
2002, more than 10% of tap water samples taken by WASA exceeded the lead action level.
The Corps of Engineers worked with a multi-agency work group to develop a new corrosion
control treatment process, and began testing a new process in June. In August, EPA approved
use of the process for the entire Aqueduct service area and also imposed supplemental
monitoring and reporting requirements on the affected public water systems. In June 2004,
EPA determined that WASA had failed to comply with numerous lead sampling, public
notification, and reporting requirements. EPA and WASA reached a consent agreement that
requires WASA to replace more than 1,600 lead service lines, improve its public education
program, and upgrade its database management systems.
National Review. EPA has undertaken a national review of lead monitoring by water
systems since 2000 to determine whether this problem is widespread. By June 2004, EPA
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had received monitoring data for 744 (89%) of the 834 systems that serve more than 50,000
people. EPA reported that 27 of these systems (3.6%) exceeded the action level at least once
since 2000, and 12 of the systems exceeded the action level during 2003. Most (66%) of the
systems serving more than 50,000 people reported that the highest level observed during any
monitoring period since 2000 was less than 5 ppb. For systems serving between 3,300 and
50,000 people, 237 (3.4%) of 7,833 systems reporting had exceeded the action level since
2000; 76 systems exceeded the action level for monitoring period ending after January 2003.
Most systems (71%) in this size category reported that the highest level of lead observed
since 2000 was less than 5 ppb. In October 2004, EPA announced that the national data from
73,000 water utilities demonstrate that lead in drinking water is not a widespread problem.
EPA also has been assessing national compliance with the lead rule and reviewing the
rule to determine whether major changes are needed. Parts of the regulation that are receiving
most scrutiny include the public notification, monitoring, and lead service line replacement
requirements. In November, EPA issued a guidance memo to clarify sampling requirements.
In the 108th Congress, H.R. 4268 and S. 2377 were introduced to strengthen the
regulation of lead in drinking water and to remediate lead in school drinking water. In
October 2004, the Senate Environment and Public Works Committee reported S. 2550, a
water infrastructure financing bill that included lead provisions. (See CRS Report RS21831,
Lead in Drinking Water: Washington, D.C., Issue and Broader Regulatory Implications.)
Methyl Tertiary Butyl Ether (MTBE). The 108th Congress also passed bills to
address drinking water contamination caused by MTBE, although none were enacted. For
technological 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 water contamination by MTBE 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. There is no federal drinking water standard for MTBE;
however, at least 7 states have set their own MTBE drinking water standard.
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 water suppliers and consumers.
In 1997, EPA issued a drinking water advisory for MTBE based on consumer
acceptability (for taste and smell). Advisories provide information on contaminants that have
not been regulated under SDWA. They are not enforceable, but provide guidance to water
suppliers and others regarding potential health effects or consumer acceptability. While the
MTBE advisory is not based on health effects, EPA states 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.
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EPA has taken steps that could lead to the issuance of a 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 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 did not select MTBE for regulation, the agency has pursued research to fill
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.
The 108th Congress passed several bills that addressed drinking water contamination by
MTBE. The Senate passed an underground storage tank bill, S. 195 (S.Rept. 108-13), which
would have authorized appropriations from the Leaking Underground Storage Tank (LUST)
Trust Fund for cleaning up MTBE contamination and would have added new leak
prevention, inspection, and enforcement requirements to the federal tank regulatory program.
The comprehensive energy bill, H.R. 6 (H.Rept. 108-375) included similar UST regulatory
provisions and authorized LUST Trust Fund appropriations to address leaks containing
MTBE or other oxygenated fuel additives, such as ethanol.
H.R. 6 also included a contentious “safe harbor” provision to prohibit products liability
lawsuits, alleging manufacturing or design defects, against producers of fuels containing
MTBE and renewable fuels, such as ethanol and bio-diesel. The safe harbor provision would
not 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. Thus, public water suppliers have widely opposed a 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 renewable fuels. Manufacturers have argued
that a safe harbor provision is reasonable, given that the fuels are used to meet federal
mandates, and that the key problem lies with leaking tanks, not with the fuels. The House
passed the conference report for H.R. 6 on November 18, 2003; however, a cloture vote
failed in the Senate. A modified version of H.R. 6, S. 2095, was introduced on February 12,
2004, and placed on the Senate Calendar. This bill contained the same UST provisions as
H.R. 6, but did not include a defective-product safe harbor for MTBE or renewable fuels. In
June, the House passed H.R. 4503, an energy bill nearly identical to H.R. 6, which included
the MTBE safe harbor. No further action occurred on any of these bills. (See also CRS
Report RS21201, Leaking Underground Storage Tanks: Program Status and Issues.)
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 the 1996 SDWA Amendments, Congress responded to growing complaints
about the Act’s unfunded mandates and authorized a drinking water state revolving loan fund
(DWSRF) program to help water systems finance infrastructure projects needed to meet
drinking water standards and address the most serious health risks. The program authorizes
EPA to award annual capitalization grants to states. States then use their grants (plus a 20%
state match) to provide loans and other assistance to systems. Communities repay loans into
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the fund, thus making resources available for projects in other communities. 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.
Congress authorized funding totaling $9.6 billion, including $1 billion for each of
FY1995 through FY2003 for the DWSRF program. The President requested $850 million
for FY2005; the House and Senate appropriations committees recommended $845 million
and $850 million, respectively. Since FY1997, Congress has provided roughly $7.7 billion
for this program, including $850 million provided in the FY2005 omnibus spending bill,
H.R. 4818. (The amount provided is $843.2 million when adjusted for an across-the-board
0.8% reduction). Through June 2003, EPA had awarded more than $5 billion in
capitalization grants that, when combined with the state match, bond proceeds, and other
funds, amounted to $8.04 billion in DWSRF funds available for loans and other assistance.
Through that same period, more than 3,100 loans had been made, and 5,333 discrete projects
had received assistance. Total assistance provided by the program reached $6.37 billion. (See
CRS Report 97-677, Safe Drinking Water Act: State Revolving Fund Program.)
Funding Issues. The DWSRF program is generally well regarded; however, many
organizations and state and local officials argue that greater investment in drinking water
infrastructure is needed. EPA’s latest survey of capital improvement needs for water systems
estimated that communities need to invest $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 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.
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 Congressional Budget Office
study, Future Investment in Drinking Water and Wastewater Infrastructure, concluded that
current funding from all levels of government, combined with current revenues from
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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 service providers, environmental groups and others) reported 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. WIN and other groups have presented proposals to Congress
for multi-billion dollar investment programs for water infrastructure. Others, however, have
called for more financial self-reliance within the water sector.
The President’s budget request for FY2004 addressed EPA’s Gap Analysis. The request
proposed that funding be continued at a level of $850 million annually through FY2018.
EPA’s budget justification explained that this level of 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 needs.
In the face of large needs, tight budgets, and debate over the federal role in funding
water infrastructure, EPA, states, and utilities have been examining alternative management
and financing strategies to address costs. Strategies 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.
In the 108th Congress, several bills were introduced to increase DWSRF funding levels.
The Senate Environment and Public Works Committee reported S. 2550, a drinking water
and wastewater infrastructure financing bill that would have authorized $15 billion over five
years for the DWSRF, and directed states to reserve a portion of their DWSRF grant to make
grants for up to 55% of project costs to qualified communities. The committee adopted
various amendments, including one that applied Davis-Bacon prevailing wage requirements
to projects receiving any DWSRF assistance, and another that directed the Water Resources
Planning Council to conduct a special study on water resources, including water security
issues. No further action occurred. (For details, see CRS Report RL32503, Water
Infrastructure Financing Legislation: Comparison of S. 2550 and H.R. 1560.)
Drinking Water Security
Congress addressed drinking water security issues in the Bioterrorism Preparedness 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. In the
108th Congress, attention has focused on several issues including the progress utilities have
made in meeting the requirements of the Bioterrorism Act and in addressing identified
vulnerabilities, and whether utilities need more resources to make security improvements.
S. 2269 would have authorized EPA to make grants to utilities to improve security and
authorized funds for the water information sharing and analysis center.
A key provision of the Bioterrorism Act required each community water system serving
more than 3,300 individuals to assess their vulnerability to terrorist attacks or other
intentional acts to disrupt the provision of a safe and reliable drinking water supply.
Combined, these systems serve more than 90% of the population served by community water
systems. The Act required these systems to certify to EPA that they conducted a vulnerability
assessment and to give EPA a copy of the assessment. The Act also required these systems
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to prepare or revise emergency response plans incorporating the results of the vulnerability
assessments no later than six months after completing them. Table 2 outlines the schedule
for utilities to submit their assessments to EPA and to complete emergency response plans.
Table 2. Community Water System Requirements
under the Bioterrorism Act
System size by population
Vulnerability assessments
Emergency response plans
(approx. no. of systems)
must be completed
must be completed
(% completed as of 10/1/04)
(% certified as of 10/1/04)
100,000 or more (425)
March 31, 2003
September 30, 2003
(100%)
(100%)
50,000 - 99,999 (460)
December 31, 2003
June 30, 2004
(98%)
(99%)
3,301 - 49,999 (7,500)
June 30, 2004
December 31, 2004
(88%)
(NA)
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 roughly $53 million in water security grants to help the largest public
water systems complete vulnerability assessments by the March 31, 2003 deadline.
Vulnerability assessments for systems serving between 50,000 and 100,000 were due
December 31, 2003. Federal grants were not available for these and smaller systems covered
by the Bioterrorism Act’s requirements. Instead, EPA, states and water organizations have
provided vulnerability assessment tools, guidance documents, training, and technical
assistance to support security enhancement efforts among these systems. Similar assistance
is also being provided for remaining 84% of community water systems that serve 3,300 or
fewer and are not required to do vulnerability assessments and emergency planning.
For FY2003, EPA requested $16.9 million for vulnerability assessments for small and
medium-sized systems and $5 million for state water security coordinators to work with EPA
and utilities in assessing drinking water safety. The Consolidated Appropriations Resolution
for FY2003 (P.L. 108-7) provided this amount plus $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 requested and received $32.4 million for critical water infrastructure
protection, including $5 million for state water security coordination grants. This funding has
supported states’ efforts to work with 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 water
security. EPA has used funds to assist the nearly 8,000 community water systems that serve
water to populations between 3,300 and 100,000 and are subject to the Bioterrorism Act.
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For FY2005, EPA requested $5 million for state water security grants and $6.1 million
for other critical infrastructure protection efforts. EPA’s budget justification explained that
the $21.3 million reduction reflected a shift in priorities from assistance and training on
vulnerability assessments. The Consolidated Appropriations Act for FY2005 provides this
amount, including $2 million for the Water Information Sharing and Analysis Center, which
shares sensitive security information with water systems. (See also CRS Report RL31294,
Safeguarding the Nation’s Drinking Water: EPA and Congressional Actions.)
Small Systems Issues
A key SDWA issue involves the financial, technical, and managerial capacity of small
systems to comply with SDWA regulations. Roughly 84% of the nation’s community water
systems are small, serving 3,300 persons or fewer; 57% of the systems serve 500 persons or
fewer. EPA and states have documented the problems many small systems face in meeting
SDWA rules, and more fundamentally, in ensuring the quality of 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 9% 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.
During the reauthorization debate leading up to the 1996 amendments, policymakers gave
considerable attention to the question of how to help small systems 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.
Small System Variances. As amended in 1996, the SDWA 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 certain cases. States or EPA may grant temporary exemptions from a standard
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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 five years after
its promulgation date. An exemption would allow three more years for qualified systems.
Small systems (serving 3,300 persons or fewer) may be eligible for up to three additional
two-year extensions, for a total exemption duration of nine 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. Prompted by intense debate over the
revised arsenic standard, its potential cost to small communities, and its delay by EPA for
further review, the conference report for EPA’s FY2002 appropriations (H.Rept. 107-272)
barred 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. EPA was required to report to Congress on a review of its
affordability criteria, administrative actions, potential funding mechanisms for small system
compliance, and possible legislative actions.
EPA’s report to Congress, Small Systems Arsenic Implementation Issues, discusses the
agency’s efforts regarding its affordability criteria for water standards, and issues involving
the arsenic rule. EPA activities included (1) reviewing the small system affordability criteria
and variance process; (2) developing a small community 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.
Congress remains concerned about compliance costs, generally, and the arsenic rule,
specifically. The conference report for H.R. 4818, the Consolidated Appropriations Act for
FY2005, directs EPA to report, by August 2005, on the extent to which communities will be
impacted by the arsenic rule, and to propose compliance alternatives and make
recommendations to minimize compliance costs. Several other bills were introduced to
address small system compliance and funding issues. H.R. 3328/S. 1432 and S. 2550
(S.Rept. 108-386) proposed to establish small system grant programs at EPA to help
qualified communities comply with SDWA standards. Relatedly, S. 1732 would have
directed the Secretary of Interior to establish a grant program for rural communities in the
Reclamation states and authorized $70 million annually for projects to ensure a safe, reliable
water supply.
LEGISLATION
P.L. 108-136, H.R. 1588 (Hunter)/S. 1050 (Warner)
The Department of Defense Authorization Act of FY2004 conference report (H.Rept.
108-354) requires an independent epidemiological study and endocrinological review of
human exposure to perchlorate in drinking water. Signed into law Nov. 24, 2003.
P.L. 108-328, H.R. 2771 (Fossella)/S. 1425 (Clinton)
Amends SDWA to reauthorize the New York City Watershed Protection Program
through 2010. Introduced July 17, 2003. H.R. 2771 was referred to the Committee on Energy
and Commerce, Subcommittee on Environment and Hazardous Materials; hearings and
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mark-up held April 2, 2004; reported from full committee April 28 (H.Rept. 108-476);
passed by the House on May 5, 2004. S. 1425 was referred to the Committee on
Environment and Public Works; reported, amended (S.Rept. 108-205), on Nov. 20, 2003.
H.R. 2771 passed the Senate on Sept. 30, 2004; signed into law on Oct. 16, 2004.
H.R. 6 (Conference Report, H.Rept. 108-375)
Sec. 327 adopts the House provision to amend SDWA to specify that the definition of
underground injection excludes the injection of fluids used in hydraulic fracturing operations
for oil and gas production, thus removing EPA’s authority to regulate the underground
injection of fluids for hydraulic fracturing purposes. The Senate bill directed EPA to study
the effects of hydraulic fracturing on underground sources of drinking water and to determine
whether regulation was needed. The House approved the conference report Nov. 18, 2003.
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 January 8, 2003; referred to Committee on Energy and
Commerce and to the Committee on the Judiciary.
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. 2123 (Capps)
Preventing Perchlorate Pollution Act of 2003 amends SDWA to require EPA to set a
drinking water standard for perchlorate by July 1, 2004. Amends the Clean Water Act to
establish safety standards applicable to perchlorate storage facilities. Establishes the
Perchlorate Pollution Prevention Fund and directs EPA to carry out a loan program to help
water suppliers and well owners to attain water that meets federal and state perchlorate
standards. Introduced May 15, 2003; referred to Committee on Energy and Commerce.
H.R. 2804 (Andrews)
Authorizes a supplemental appropriation of $85 million for the DWSRF program for
FY2003, and requires that state source water assessment programs address nine specific
pesticides. Introduced July 21, 2003; referred to the Committee on Appropriations.
H.R. 3328 (Wilson)/S. 1432 (Domenici)
Amends SDWA to establish an EPA-administered grant program to help eligible small
and certain specified community water systems to comply with drinking water standards.
H.R. 3328 was introduced October 16, 2003; referred to the Committee on Energy and
Commerce. S. 1432 was introduced July 21, 2003; referred to the Committee on
Environment and Public Works.
H.R. 4268 (Norton)/S. 2377 (Jeffords)
Lead-Free Drinking Water Act of 2004 amends SDWA to: strengthen the regulation of
lead in drinking water; hasten the replacement of lead service lines; increase monitoring,
public notification requirements; and remediate lead in school drinking water. Both were
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introduced May 4, 2004. H.R. 4268 was referred to the Committee on Energy and
Commerce. S. 2377 was referred to the Committee on Environment and Public Works.
H.R. 4717 (Otter)
Requires states to grant nonprofit, small public water systems exemptions from the
requirements of federal drinking water regulations for naturally occurring contaminants,
where compliance is not economically feasible. Introduced June 25, 2004; referred to the
Committee on Energy and Commerce.
H.R. 5344 (Solis)
Requires EPA to promulgate a drinking water standard for perchlorate. Introduced on
Oct. 8, 2004; referred to the Committee on Energy and Commerce.
S.Amdt. 2784 to S.Con.Res. 95 (Crapo)
Amendment to concurrent resolution, which set forth the FY2005 budget and budgetary
levels for FY2006-FY2009, to increase funding for the Clean Water SRF and DWSRF by
$5.2 billion over five years. Agreed to March 11, 2004; passed by Senate March 14, 2004.
S. 502 (Boxer)
Requires 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.
S. 820 (Boxer)
Perchlorate Community Right-to-Know Act amends the Clean Water Act to establish
safety standards for perchlorate storage facilities. Creates the Perchlorate Pollution
Prevention Fund and directs EPA to carry out a loan program to help water suppliers and
well owners attain water that meets perchlorate standards. Introduced April 8, 2003; referred
to the Committee on Environment and Public Works.
S. 1163 (Hutchison)
Prohibits a U.S.-Mexico border state from receiving federal SRF grants unless the state
requires local governments to set and enforce ordinances to prevent colonias development.
Introduced June 2, 2003; referred to the Committee on Environment and Public Works.
S. 1413 (Boxer)
Authorizes feasibility studies for specific water quality and supply projects in California
and authorizes appropriations for the DWSRF for FY2004 at a level of $2 billion. Introduced
July 15, 2003; referred to the Committee on Environment and Public Works.
S. 1732 (Domenici)
Directs the Secretary of the Interior to establish a rural water supply program to serve
the Reclamation states. Authorizes $70 million per year for water quality and supply projects.
Introduced October 15, 2003; referred to the Committee on Energy and Natural Resources.
Hearings held March 25, 2004 (S.Hrg. 108-639).
S. 2269 (Bond)
The Environmental Enforcement and Security Act directs EPA to increase the number
of special agents assigned to criminal enforcement and homeland security; authorizes funds
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for grants to water systems to improve security and funds to operate the Water ISAC.
Introduced April 1, 2004; referred to the Committee on Environment and Public Works.
S. 2550 (Crapo)
The Water Infrastructure Financing Act amends the Clean Water Act and SDWA to
improve drinking water and wastewater infrastructure. Authorizes $15 billion over five years
for the DWSRF, directs states to reserve a portion of their DWSRF grant to make grants to
qualified communities, establishes a small system grant program at EPA, applies prevailing
wage provisions to water projects, authorizes funding to address lead contamination, requires
a national assessment of perchlorate contamination and a study on water resources.
Introduced June 21, 2004; referred to the Committee on Environment and Public Works;
reported (S.Rept. 108-386), with amendments, on Oct. 7, 2004.
S. 2717 (Nelson, E. Benjamin)
Requires states to grant small, nonprofit systems exemptions from drinking water
regulations for naturally occurring contaminants, in certain cases. Sets alternative arsenic
standards for exempt systems. Directs EPA to establish arsenic research consortium.
Introduced July 22, 2004; referred to the Committee on Environment and Public Works.
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
U.S. Congress. House. Committee on Energy and Commerce. Subcommittee on
Environment and Hazardous Materials. Tapped Out: Lead in the District of Columbia
and the Providing of Safe Drinking Water. Hearing, July 22, 2004, 108th Congress, 2nd
session. 155 p. (108-97)
——Drinking Water Needs and Infrastructure. Hearing, April 11, 2002. 107th Congress, 2nd
session. 108 p. (107-107)
U.S. Congress. House. Committee on Government Reform. Subcommittee on Energy Policy,
Natural Resources and Regulatory Affairs. EPA Water Enforcement: Are We on the
Right Track? Hearing, Oct. 14, 2003, 108th Congress, 1st session. 201p. (108-157)
U.S. Congress. House. Committee on Government Reform. Public Confidence, Down the
Drain: the Federal Role in Ensuring Safe Drinking Water in the District of Columbia.
Hearing, March 5, 2004, 108th Congress, 2nd session. 268 p. (108-161)
U.S. Senate. Committee on Environment and Public Works. Water Infrastructure Financing
Act. Report to accompany S. 2550. Oct.7, 2004. S.Rept. 108-386. 116 p.
FOR ADDITIONAL READING
U.S. Environmental Protection Agency. The Clean Water and Drinking Water Infrastructure
Gap Analysis Report. Report No. EPA 816-R-02-020. September 2002. 50 p.
U.S. General Accounting Office. Water Infrastructure: Information on Financing, Capital
Planning, and Privatization. GAO-02-764. August 2002. 83 p.
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