Order Code RL33465
CRS Report for Congress
Received through the CRS Web
Clean Water Act Issues in the 109th Congress
June 12, 2006
Claudia Copeland
Specialist in Resources and Environmental Policy
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

---

Clean Water Act Issues in the 109th Congress
Summary
Legislative initiatives to comprehensively amend the Clean Water Act (CWA)
have stalled for some time as interested parties have debated whether and exactly
how to change the law. Congress has recently focused legislative attention on narrow
bills to extend or modify selected CWA programs, rather than taking up
comprehensive proposals. For example, the 108th Congress enacted one bill
amending the CWA: legislation to reauthorize the National Estuary Program (H.R.
4731, P.L. 108-399). In the 109th Congress, Congress passed legislation to extend
authorizations for the Long Island Sound Program (H.R. 3963, P.L. 109-137). The
House has passed H.R. 1721, a bill to reauthorize coastal water quality programs.
Also, the Senate Environment and Public Works Committee has approved S. 1400,
a bill authorizing $20 billion in federal grants to capitalize state clean water
infrastructure loan programs. A House committee has approved bills to reauthorize
other Clean Water Act programs: H.R. 624 would provide $1.5 billion in grants over
six years for sewer overflow projects; and H.R. 1359 would extend a pilot program
for alternative water source projects.
Following Hurricanes Katrina and Rita, the Senate passed legislation to
streamline delivery of funds to repair storm-damaged sewage treatment plants (S.
1709). Other bills intended to simplify environmental review of recovery and
rebuilding projects also have been introduced (S. 1711, S. 1765/S. 1766).
For several years, the most prominent legislative water quality issue has
concerned financial assistance for municipal wastewater treatment projects, and it has
received attention in the 109th Congress as well. At issue is how the federal
government will assist states and cities in meeting needs to rebuild, repair, and
upgrade wastewater treatment plants, especially in light of capital costs that are
projected to be as much as $390 billion over the next two decades.
Several other Clean Water Act issues could receive congressional attention.
Programs that regulate activities in wetlands, especially CWA Section 404, have been
criticized by landowners for intruding on private land-use decisions and imposing
excessive economic burdens. Environmentalists view these programs as essential for
maintaining the health of wetland ecosystems. These groups are concerned about a
2001 Supreme Court decision, the SWANCC case, that narrowed regulatory
protection of wetlands, and related administrative actions, including 2003 policy
guidance intended to interpret the case. Legislation to reverse the SWANCC ruling
has been introduced in the 109th Congress (H.R. 1356, the Clean Water Authority
Restoration Act), as has a bill to narrow the government’s regulatory jurisdiction
(H.R. 2658, the Federal Wetlands Jurisdiction Act).
Also of interest is whether and how the Administration will revise the current
program for restoration of pollution-impaired waters (the Total Maximum Daily
Load, or TMDL, program), in view of continuing controversies.
This report replaces CRS Issue Brief IB10142, Clean Water Act Issues in the
109th Congress, by Claudia Copeland. It will be updated as warranted.

---

Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Legislative Activity Since P.L. 100-4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
109th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Recovery from Hurricanes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Wastewater Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Legislative Issues in the 109th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Authorization of Water Infrastructure Funding . . . . . . . . . . . . . . . . . . . . . . . 7
Legislative Responses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Other Clean Water Act Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Regulatory Protection of Wetlands . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
TMDLs and State Water Quality Standards . . . . . . . . . . . . . . . . . . . . . 13
Other Implementation Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

---

Clean Water Act Issues
in the 109th Congress
Most Recent Developments
Wastewater security issues are again receiving attention in the 109th Congress.
On May 23, the Senate Environment and Public Works Committee approved S. 2781,
a bill that encourages wastewater utilities to conduct vulnerability assessments and
authorizes $220 million to assist these utilities with assessments and preparation of
site security plans.
In December 2005, the House and Senate passed legislation to reauthorize
funding for the Long Island Sound Program in the Clean Water Act; President Bush
signed it on December 22 (H.R. 3963, P.L. 109-137). Also in December, the House
passed H.R. 1721, a bill to reauthorize coastal water quality programs in the Act.
Water infrastructure funding legislation has been receiving congressional attention
because of estimates by the Environmental Protection Agency that as much as $390
billion will be needed over the next two decades to rebuild, repair, and upgrade the
nation’s wastewater treatment plants. In July 2005, the Senate Environment and
Public Works Committee approved S. 1400, a bill authorizing federal funds for local
wastewater and drinking water infrastructure programs, including $20 billion to
capitalize state clean water infrastructure loan programs.
In the Gulf Coast region affected by Hurricanes Katrina and Rita, high winds
and water damaged several hundred sewage treatment plants, along with many other
public and private facilities and structures. Assessment and repair of water
infrastructure facilities is underway, and legislation has been introduced in the 109th
Congress to aid recovery and rebuilding. One bill intended to streamline delivery of
funds to repair storm-damaged sewage treatment plants (S. 1709) was passed by the
Senate on September 27. Other bills are intended to simplify environmental review
of recovery and rebuilding projects (S. 1711, S. 1765/S. 1766).
Background and Analysis
Although much progress has been made in achieving the ambitious goals that
Congress established 30-plus years ago to restore and maintain the chemical,
physical, and biological integrity of the nation’s waters, problems persist. The types
of remaining water quality problems are diverse, ranging from pollution runoff from
farms and ranches, city streets, and other diffuse or “nonpoint” sources, to metals, as
well as organic and inorganic toxic substances discharged from factories and sewage
treatment plants.

---

CRS-2
The principal law that deals with polluting activity in the nation’s streams, lakes,
estuaries, and coastal waters is the Federal Water Pollution Control Act (P.L. 92-500,
enacted in 1972), commonly known as the Clean Water Act, or CWA (amended by
P.L. 95-217 in 1977, P.L. 97-117 in 1981, and P.L. 100-4 in 1987). It consists of two
major parts: regulatory provisions that impose progressively more stringent
requirements on industries and cities to abate pollution and meet the statutory goal
of zero discharge of pollutants; and provisions that authorize federal financial
assistance for municipal wastewater treatment plant construction. Both parts are
supported by research activities, plus permit and enforcement provisions. Programs
at the federal level are administered by the Environmental Protection Agency (EPA);
state and local governments have major responsibilities to implement CWA
programs through standard-setting, permitting, and enforcement.1
The objective declared in the 1972 Act of restoring and maintaining the
chemical, physical, and biological integrity of the nation’s waters was accompanied
by statutory goals to eliminate the discharge of pollutants into navigable waters by
1985 and to attain, wherever possible, waters deemed “fishable and swimmable” by
1983. While those goals have not been fully achieved, considerable progress has
been made, especially in controlling conventional pollutants (suspended solids,
bacteria, and oxygen-consuming materials) discharged by industries and municipal
sewage treatment plants.
Progress has been mixed in controlling discharges of toxic pollutants (heavy
metals, inorganic and organic chemicals), which are more numerous and can harm
human health and the environment even when present in minute amounts — at the
parts-per-billion level. Moreover, efforts to control pollution from diffuse sources,
termed nonpoint source pollution (rainfall runoff from urban, suburban, and
agricultural areas, for example), are more recent, given the earlier emphasis on “point
source” pollution (discharges from industrial and municipal wastewater treatment
plants). Overall, data reported by EPA and states indicate that 39% of river and
stream miles assessed by states and 45% of assessed lake acres do not meet
applicable water quality standards and are impaired for one or more desired uses.
Approximately 95,000 lakes and 544,000 river miles in the United States are under
fish-consumption advisories (including 100% of the Great Lakes and their connecting
waters), due to chemical contaminants in lakes, rivers, and coastal waters, and one-
third of shellfishing beds are closed or restricted, due to toxic pollutant
contamination. For mercury — a contaminant of growing concern — as of 2003, 45
states had issued partial or statewide fish or shellfish consumption advisories.
The most recent major amendments were enacted in 1987 (P.L. 100-4); this was
the first comprehensive revision to the law in a decade. Authorizations for a number
of programs, such as general grant assistance to states, research, and general EPA
support authorized in that law, expired in FY1990 and FY1991. Authorizations for
wastewater treatment funding expired in FY1994. None of these programs has
1 For further information, see CRS Report RL30030, Clean Water Act: A Summary of the
Law, by Claudia Copeland.

---

CRS-3
lapsed, however, as Congress has continued to appropriate funds to implement the
Act.2
The Clean Water Act has been viewed as one of the most successful
environmental laws in terms of achieving its statutory goals, which have been widely
supported by the public, but lately some have questioned whether additional actions
to achieve further benefits are worth the costs. Criticism has come from industry,
which has been the long-standing focus of the Act’s regulatory programs and often
opposes imposition of new stringent and costly requirements. Criticism also has
come from developers and property rights groups who contend that federal
regulations (particularly the Act’s wetlands permit program) are a costly intrusion on
private land-use decisions. States and cities have traditionally supported water
quality programs and federal funding to assist them in carrying out the law, but
recently many have opposed CWA measures that they fear might impose new
unfunded mandates. Many environmental groups believe that further fine-tuning to
strengthen the Act is needed to maintain progress achieved to date and to address
remaining water quality problems.
Legislative Activity Since P.L. 100-4
Following enactment of amendments in 1987, no major CWA legislative
activity occurred until the 104th Congress (1995). The House approved a
comprehensive reauthorization bill, H.R. 961, that was opposed by environmentalists
and the Clinton Administration. Critics said that the bill would undermine the
existing framework for protecting U.S. waters. The Senate did not take up H.R. 961
or other CWA legislation.
In the 105th and 106th Congresses, no comprehensive reauthorization legislation
was introduced, but action was taken in the 106th Congress on bills dealing with
specific water quality issues. Congress passed a bill to strengthen protection of
coastal recreation waters through upgraded water quality standards and coastal waters
monitoring programs (P.L. 106-284). Congress also passed a bill (P.L. 106-457) that
reauthorized several existing CWA programs (i.e., Chesapeake Bay cleanup, clean
lakes, and the National Estuary Program), and a bill to authorize CWA grant funding
for wet weather sewerage projects (included as a provision of the FY2001
Consolidated Appropriations bill, P.L. 106-554).
During its tenure, the Clinton Administration did not offer legislation to
reauthorize the CWA, but rather initiated a number of agency-wide and program-
specific reforms focusing on flexibility and what were termed “common sense”
approaches to regulation.
The 107th Congress focused legislative attention on one of the key programs of
the Act, provisions concerning financial assistance for municipal wastewater
treatment projects. House and Senate committees approved bills to extend the Act’s
State Revolving Fund (SRF) program through FY2007 (H.R. 3930, S. 1961). Neither
2 For further information, see CRS Report RL33466, Water Quality: Implementing the
Clean Water Act, by Claudia Copeland.

---

CRS-4
bill received further action, in large part due to controversies over application of the
Davis-Bacon Act, which requires that contractors, engaging in certain federal
contract construction, pay workers on such projects not less than the locally
prevailing wage for comparable work, and over the formula for allocating SRF grants
among the states.
The single water quality measure enacted by the 107th Congress was the Great
Lakes Legacy Act (P.L. 107-303). It amended existing Great Lakes provisions of the
CWA (Section 118) to authorize $50 million annually for FY2004-FY2008 for EPA
to carry out projects to remediate sediment contamination in the Great Lakes. The
bill also reauthorized CWA provisions concerning the Lake Champlain Basin
Program. Miscellaneous provisions revived a number of CWA reports to Congress
that had been discontinued under a previously passed “sunset” law (P.L. 104-66) and
allowed states to use CWA Section 319 grant funds for stormwater management
projects in FY2003.
In the 108th Congress, attention again focused on water infrastructure financing
issues, although no bill was enacted (see below). However, there was some action
on bills to reauthorize existing, mostly geographic-specific programs in the Clean
Water Act. Before recessing for the 2004 election, the House and Senate passed H.R.
4731, to reauthorize the National Estuary Program through FY2010. The President
signed this bill on October 30, 2004 (P.L. 108-399). The National Estuary Program,
authorized by the 1987 CWA amendments, is directed at improving the quality of
estuaries of national importance. Also in September 2004, the House Transportation
and Infrastructure Committee reported three other bills. They were (1) H.R. 784, to
reauthorize section 221 of the Act and provide $1.5 billion over six years for sewer
overflow projects (H.Rept. 108-675); (2) H.R. 4470, to extend the Lake Pontchartrain
Basin Restoration Program in Section 121 through FY2010 (H.Rept. 108-676); and
(3) H.R. 4688, to reauthorize the Chesapeake Bay Program through FY2010 (H.Rept.
108-677). The House passed H.R. 4470 on October 7, 2004, but no further action
occurred. Also on October 7, the House passed H.R. 4794, to amend and reauthorize
the Tijuana River Valley Estuary and Beach Sewage Cleanup Act (P.L. 106-457) in
order to address treatment of sewage from Tijuana, Mexico, that impacts the San
Diego border region. The Senate passed this bill on November 16, 2004, and the
President signed it on November 30 (P.L. 108-425; this law does not amend the
CWA).
109th Congress. In December 2005, Congress passed H.R. 3963 (H.Rept.
109-293), authorizing $40 million per year for six years to extend the Long Island
Sound program under Section 119 of the Act. President Bush signed it on December
22 (P.L. 109-137). Also in December, the House approved H.R. 1721 (H.Rept. 109-
292), to extend the coastal water quality program in Section 406 of the Act and to
authorize $30 million over six years for coastal water quality monitoring.
On July 20, the Senate Environment and Public Works Committee approved S.
1400 (S.Rept. 109-186), authorizing federal funds for water quality and drinking
water State Revolving Fund programs (see discussion below). On May 18, 2005, the
House Transportation and Infrastructure Committee approved bills to reauthorize two
other existing CWA programs. The bills are (1) H.R. 624 (H.Rept. 109-166), to
reauthorize Section 221 of the Act and provide $1.5 billion over six years for sewer

---

CRS-5
overflow projects (identical to H.R. 784 from the 108th Congress) and (2) H.R. 1359
(H.Rept. 109-167), to extend Section 220 of the Act, authorizing a pilot program for
alternative water source projects (H.R. 1560 and S. 2550 in the 108th Congress also
would have reauthorized Section 220 — see discussion of these bills below).
Recovery from Hurricanes. Throughout the Gulf Coast region affected by
Hurricanes Katrina and Rita in 2005, high winds and water damaged a wide range of
public service facilities, including sewage treatment plants, and restoring those
facilities is part of the overall cleanup and restoration process. Damages at many
facilities included loss of electric power after the storm to pump, process, and treat
raw water supply and wastewater. EPA and the U.S. Army Corps of Engineers staff
are assisting state and local government personnel to evaluate damages. Efforts to
assess facilities continue throughout the region to determine their operating status,
including needs to repair or rebuild, but EPA reported that by October 10, more than
95% of wastewater treatment facilities in the affected region were operational,
although many may require major repairs or rebuilding. Even months after the
storms — and with the 2006 hurricane season approaching — facilities in some cities
(serving parts of New Orleans, for example) are not operational.3
The 109th Congress has been considering a wide range of legislative proposals
to aid generally in response and recovery. In particular, S. 1709, passed by the Senate
on September 27, would modify the revolving loan provisions of the Clean Water
Act to provide favorable treatment (such as forgiveness of loan principal and
extended repayment) for sewage treatment repair or rebuilding projects in Alabama,
Mississippi and Louisiana. It also would permit those states for two years to provide
CWA assistance even for projects not included on a state’s Intended Use Plan, since
many of the systems affected by Hurricane Katrina are believed to not be included
in the plans. More generally, some have suggested that environmental review and
permitting requirements of the Clean Water Act and other federal environmental laws
should be modified to enable swift recovery from the storms. Several bills with
provisions intended to do so have been introduced (S. 1711, S. 1765/S. 1766) and
could receive congressional consideration.4
Wastewater Security. Since the September 11, 2001 terrorist attacks in the
United States, congressional attention has focused on security, preparedness, and
emergency response issues. Among the topics of interest are protection of the
nation’s water infrastructure facilities (both drinking water and wastewater) from
possible physical damage, biological/chemical attacks, and cyber disruption.5
Policymakers have examined a number of legislative options in this area,
including enhanced physical security, communication and coordination, and research.
3 For information, see CRS Report RS22285, Hurricane-Damaged Drinking Water and
Wastewater Facilities: Impacts, Needs, and Response, by Claudia Copeland.
4 For additional discussion, see CRS Report RL33107, Emergency Waiver of EPA
Regulations: Authorities and Legislative Proposals in the Aftermath of Hurricane Katrina,
by James E. McCarthy and Claudia Copeland.
5 For information, see CRS Report RL32189, Terrorism and Security Issues Facing the
Water Infrastructure Sector, by Claudia Copeland and Betsy Cody.

---

CRS-6
In October 2002, the House passed legislation to authorize $200 million in grants for
security activities at wastewater treatment plants (H.R. 5169). It also authorized $15
million in technical assistance for small treatment plant facilities and $5 million to
EPA for improved vulnerability assessment tools. Similar legislation was introduced
in the Senate (S. 3037), but no further action occurred. Congress did enact
legislation authorizing $160 million in grants for drinking water utilities to conduct
vulnerability assessments (P.L. 107-188).
In the 108th Congress, the House passed legislation similar to H.R. 5169. H.R.
866 (H.Rept. 108-33) would authorize $200 million in grants to wastewater utilities
to conduct vulnerability assessments and an additional $20 million for technical
assistance and improved assessment tools. The Senate Environment and Public
Works Committee approved a similar bill (S. 1039, S.Rept. 108-149) in May 2003.
No further action occurred, due in part to concerns expressed by some that the
legislation would not mandate vulnerability assessments and would not require that
they be submitted to EPA, as is the case with drinking water assessments required by
P.L. 107-188.
Wastewater security issues are again receiving attention in the 109th Congress.
On May 23, the Senate Environment and Public Works Committee approved S. 2781.
It is similar to S. 1039 in the 108th Congress in that it encourages wastewater utilities
to conduct vulnerability assessments and authorizes $220 million to assist utilities
with assessments and preparation of site security plans. It also includes provisions
responding to a March 2006 GAO report that found that utilities have made little
effort to address vulnerabilities of collection systems, which may be used by terrorists
to introduce hazardous substances or as access points for underground travel to a
potential target.6 S. 2781 authorizes EPA to conduct research on this topic. During
consideration of the bill, the Senate committee rejected an amendment that would
have required, rather than encouraged, treatment works to conduct vulnerability
assessments and also would have required high-risk facilities to switch from using
chlorine and similar hazardous substances to other chemicals that are often referred
to as “inherently safer technologies.”
Legislative Issues in the 109th Congress
The year 2002 marked the 30th anniversary of passage of the Clean Water Act
and 15 years since the last major amendments to the law. While, as noted, there has
been measurable clean water progress as a result of the Act, observers and analysts
agree that significant water pollution problems remain. However, there is less
agreement about what solutions are needed and whether new legislation is required.
Several key water quality issues exist: evaluating actions to implement existing
provisions of the law, assessing whether additional steps are necessary to achieve
overall goals of the Act that have not yet been attained, and defining the appropriate
federal role in guiding and paying for clean water infrastructure and other activities.
6 U.S. Government Accountability Office. Securing Wastewater Facilities, Utilities Have
Made Upgrades but Further Improvements to Key System Components May Be Limited by
Costs and Other Constraints. GAO-06-390. March 2006. 64 p.

---

CRS-7
For some time, efforts to comprehensively amend the Act have stalled as interests
have debated whether and exactly how to change the law. Many issues that might be
addressed involve making difficult tradeoffs between impacts on different sectors of
the economy, taking action when there is technical or scientific uncertainty, and
allocating governmental responsibilities for implementing the law.
These factors partly explain why Congress has recently favored focusing
legislative attention on narrow bills to extend or modify selected CWA programs,
rather than taking up comprehensive proposals. Other factors also are at work.
These include a general reluctance by most Members of Congress to address
controversial environmental issues in view of the slim majorities held by political
parties in the House and the Senate; lack of presidential initiatives on clean water
issues (neither the Clinton nor the Bush Administration proposed CWA legislation);
and since the terrorist attacks of September 11, 2001, more prominent congressional
focus on security and terrorism issues than on many other topics, including
environmental protection.
Authorization of Water Infrastructure Funding
The Act’s program of financial aid for municipal wastewater treatment plant
construction is a central feature of the law. At issue today is how the federal
government will assist states and cities, especially in view of the high projected
funding needs that exist. It has received attention in the 109th Congress, as it has for
several years, although controversies have stymied enactment of new legislation.
Since 1972, Congress has provided a total of $75 billion to assist cities in
constructing projects to achieve the Act’s requirements for secondary treatment of
municipal sewage (equivalent to 85% reduction of wastes), or more stringent
treatment where required by local water quality conditions. The CWA does not
authorize funds for operation or maintenance of completed projects. State and local
governments have spent more than $25 billion of their own funds for construction,
as well. In addition to CWA programs, other sources of federal funding are
administered by the U.S. Department of Agriculture and the Department of Housing
and Urban Development.7
Nevertheless, funding needs remain very high: an additional $181 billion
nationwide for all types of projects eligible for funding under the Act, according to
the most recent Needs Survey estimate by EPA and the states, completed in August
2003.8 In September 2002, EPA released a study, called the Gap Analysis, that
assessed the difference between current spending for wastewater infrastructure and
total funding needs (both capital and operation and maintenance).9 In that report,
EPA estimated that, over the next two decades, the United States needs to spend
7 For information, see CRS Report RL30478, Federally Supported Water Supply and
Wastewater Treatment Programs.
8 U.S. Environmental Protection Agency. Clean Watersheds Needs Survey 2000, Report to
Congress. Washington. August 2003. EPA 832-03-001. 1 vol.
9 U.S. Environmental Protection Agency. The Clean Water and Drinking Water
Infrastructure Gap Analysis. September 2002. EPA 816-R-02-020. 50 p.

---

CRS-8
nearly $390 billion to replace existing wastewater infrastructure systems and to build
new ones (including for some projects not currently eligible for CWA funds, such as
system replacement, which are not reflected in the EPA-state Needs Survey).
Funding needs for operation and maintenance, which are not currently eligible for
federal aid, are an additional $148 billion, the agency estimates. According to the
Gap Analysis, if there is no increase in investment, there will be about a $6 billion
gap between current annual capital expenditures for wastewater treatment ($13
billion annually) and projected spending needs. The study also estimated that, if
wastewater spending increases by 3% annually, the gap would shrink by nearly 90%
(to about $1 billion annually). Outside groups, including a coalition called the Water
Infrastructure Network, have offered proposals that have attracted some
congressional interest for a multibillion dollar investment program in wastewater and
drinking water infrastructure.10
The 1987 amendments initiated a program of grants to capitalize State Water
Pollution Control Revolving Funds (SRF), or loan programs. This program in Title
VI of the Act replaced the previous categorical grants program, under which the
federal share was 55% of project costs, and localities were not obligated to repay
federal funds that they received. Under the revolving fund concept, monies used for
construction will be repaid by borrowing communities to the states, to be recycled for
future construction in other communities, thus providing an ongoing source of
financing. States must provide a 20% match of the federal amount. The intent of the
1987 amendments was that federal contributions to SRFs would assist in making a
transition to full state and local financing by FY1995. The essential tradeoff was that
states would have greater flexibility to set priorities and administer funding in
exchange for ending federal aid after FY1994.11
All states have established the mechanisms to administer the new loan programs
and have been receiving SRF capitalization funds under Title VI for several years.
Many have complained that the SRF program is unduly complicated by federal rules,
even though Congress had intended that states were to have greater flexibility.
Congressional oversight has examined the progress toward reducing the backlog of
wastewater treatment facilities needed to achieve the Act’s water quality objectives,
while newer estimates of future funding needs have drawn increased attention to the
role of the SRF program in meeting such needs.
Small communities and states with large rural populations have experienced the
largest share of problems with the SRF program. Many small towns did not
participate in the previous construction grants program and consequently are likely
to require major projects to achieve compliance with the law. Yet these communities
often lack an industrial tax base and thus face the prospect of very high per capita
user fees, if their citizens are required to repay the full capital cost of sewage
treatment projects.
10 For additional information, see CRS Report RL31116, Water Infrastructure Needs and
Investment: Review and Analysis of Key Issues, by Claudia Copeland and Mary Tiemann.
11 For additional information, see CRS Report 98-323, Wastewater Treatment: Overview
and Background, by Claudia Copeland.

---

CRS-9
While the initial intent was to phase out federal support for this program,
Congress has continued to appropriate SRF capitalization grants to the states,
providing an average of $1.35 billion annually in recent years. The SRF provisions
have been less controversial than others in the Act, such as wetlands reform, because
of apparent general agreement on the need to provide funding assistance (as reflected
in continued appropriations). The CWA’s SRF provisions also were a model for
similar provisions added to the Safe Drinking Water Act (SDWA) in 1996 (P.L. 104-
182).
However, because remaining clean water funding needs are still so large, at
issue is whether and how to extend SRF assistance to address those needs, how to
allocate SRF funds among the states, and how to prioritize projects and funding.
Bush Administration officials have said that infrastructure funding needs go beyond
what the federal government can do on its own. Of particular concern is assisting
small and economically disadvantaged communities that have had the most difficulty
in adjusting from the Act’s previous categorical grants program to SRF loans.
Additionally, there is concern about the adequacy of SRF or other funding
specifically for projects dealing with problems of overflows from municipal
combined and separate sewers which can release partially treated or untreated
wastewaters that harm public health and the environment. EPA estimates that the
cost of projects to control sewer overflows, from combined and separate sanitary
sewer systems, is nearly $140 billion nationwide. And more recently, wastewater
utilities have sought assistance to assess operational vulnerabilities and upgrade
physical protection of their facilities against possible terrorist attacks that could
threaten water infrastructure systems.12
Legislative Responses. The 107th Congress considered but did not pass
legislation to address infrastructure funding issues. House and Senate committees
approved bills to extend the Act’s SRF program through FY2007 and increase federal
assistance (H.R. 3930, S. 1961), but neither bill received further action, in large part
due to controversies over application of prevailing wage requirements of the Davis-
Bacon Act and over the formula for allocating SRF grants among the states.
In the 108th Congress, four bills to reauthorize the Clean Water Act SRF
program were introduced (S. 170, S. 2550, H.R. 20, H.R. 1560). In addition, separate
bills to reauthorize funding for sewer overflow grants (CWA Section 221) were
introduced (H.R. 784, S. 567).
On October 7, 2004, the Senate Environment and Public Works Committee
reported legislation authorizing $41.25 billion over five years for wastewater and
drinking water infrastructure programs, including $20 billion for the clean water SRF
program (S. 2550, S.Rept. 108-386). The bill included a new formula for state-by-
state allocation of clean water SRF grants, renewal of the Clean Water Act’s sewer
12 Water infrastructure funding issues related to annual appropriations also are an issue of
interest to Congress; for information see CRS Issue Brief IB89102, Water Quality:
Implementing the Clean Water Act, by Claudia Copeland.

---

CRS-10
overflow grant program, and provisions such as extended loan repayments and
subsidies for disadvantaged communities.
Prior to the Senate committee’s action, in July 2003, the House Transportation
and Infrastructure Subcommittee on Water Resources and Environment approved
H.R. 1560, legislation similar to H.R. 3930, the bill approved by that committee in
2002. H.R. 1560 would have authorized $20 billion for the clean water SRF program
for FY2004-FY2008. It included several provisions intended to benefit economically
disadvantaged and small communities, such as allowing extended loan repayments
(30 years, rather than 20) and additional subsidies, including principal forgiveness
and negative interest loans, for communities that meet a state’s affordability criteria.
It includes provisions to require communities to plan for capital replacement needs
and to develop and implement an asset management plan for the repair and
maintenance of infrastructure that is being financed.13
The issue of the applicability of the prevailing local wage requirements of the
Davis-Bacon Act to SRF-funded projects has affected consideration of water
infrastructure legislation for some time, because that Act has both strong supporters
and critics in Congress. Critics of Davis-Bacon say that it unnecessarily increases
public construction costs and hampers competition, while supporters say that it helps
stabilize the local construction industry by preventing competition that would
undercut local wages and working conditions. The bill approved by the House
subcommittee in July 2003 did not include language specifying that the Davis-Bacon
Act shall apply to SRF-funded projects, while the bill approved by the Senate
Environment and Public Works Committee did include such a requirement. Other
factors that clouded the bills were Administration opposition to authorization levels
in S. 2550 and H.R. 1560 and dispute over funding allocation formulas.
In the 109th Congress, the Senate Environment and Public Works Committee
approved S. 1400, the Water Infrastructure Financing Act, on July 20 (S.Rept. 109-
186). The bill is similar to S. 2550 in the 108th Congress; it authorizes $20 billion
for grants to capitalize the Clean Water Act SRF program and $15 billion for Safe
Drinking Water Act SRFs through FY2010. As approved by the committee, S. 1400
would revise and update the CWA formula for state-by-state allocation of SRF
monies and also would specify that the prevailing wage requirements of the Davis-
Bacon Act shall apply to all projects financed from an SRF (as similarly provided in
the committee’s bill in the 108th Congress).
On June 8 and 14, 2005, the House Transportation and Infrastructure
Subcommittee on Water Resources and Environment held hearings on alternative
means to fund water infrastructure projects in the future. At the first hearing,
witnesses focused on one way to increase funding for water infrastructure that has
recently been advocated by some groups, creating a national clean water trust fund
that would conceptually be similar to trust funds that exist for highway and aviation
projects. Witnesses and subcommittee members discussed difficulties in identifying
potential revenue sources that would be deemed fair and equitable. The second
13 For information, see CRS Report RL32503, Water Infrastructure Financing Legislation:
Comparison of S. 2550 and H.R. 1560, by Claudia Copeland and Mary Tiemann.

---

CRS-11
hearing addressed other financing options, such as expanded use of tax-exempt
private activity bonds, and more efficient management techniques, such as asset
management programs and sustainable infrastructure initiatives. In December,
legislation was introduced in the House to establish a $7.5 billion federal trust fund
for wastewater infrastructure improvements. This bill, H.R. 4560, uses a concept for
funding such projects that has been promoted by wastewater treatment industry
officials, other stakeholders, and some environmentalists, who argue it could provide
a new source of money for necessary system upgrades amid dwindling federal funds.
The bill contemplates a system of user fees to create the fund, but the source of
revenue is not specified in the bill.
Other Clean Water Act Issues
Several other CWA issues could receive congressional attention.
Regulatory Protection of Wetlands. How best to protect the nation’s
remaining wetlands and regulate activities taking place in wetlands has become one
of the most contentious environmental policy issues, especially in the context of the
CWA, which contains a key wetlands regulatory tool, the permit program in Section
404. It requires landowners or developers to obtain permits for disposal of dredged
or fill material that is generated by construction or similar activity into navigable
waters of the United States, including wetlands. Section 404 has evolved through
judicial interpretation and regulatory change to become one of the principal federal
tools used to protect wetlands, although that term appears only once in Section 404
itself and is not defined there. At the same time, its implementation has come to be
seen as intrusive and burdensome to those whose activities it regulates. At issue
today is how to address criticism of the Section 404 regulatory program while
achieving desired goals of wetlands protection.14
Unlike the rest of the Act, the permit aspects of Section 404 are administered
by the U.S. Army Corps of Engineers, rather than EPA, although the Corps uses EPA
environmental guidance. Other federal agencies including the U.S. Fish and Wildlife
Service (FWS) and Natural Resource Conservation Service (NRCS) have more
limited roles in the Corps’ permitting decisions. Tension has existed for many years
between the regulation of activities in wetlands under Section 404 and related laws,
on the one hand, and the desire of landowners to develop property that may include
wetlands, on the other hand. The conflicts over wetlands regulation have for the
most part occurred in administrative proceedings, as Congress has not amended
Section 404 since 1977, when it provided exemptions for categories of routine
activities, such as normal farming and forestry. Controversy has grown over the
extent of federal jurisdiction and impacts on private property, burdens and delay of
permit procedures, and roles of federal agencies and states in issuing permits.
The Supreme Court’s SWANCC Decision. One issue involving long-
standing controversy and litigation is whether isolated waters are properly within the
jurisdiction of Section 404. Isolated waters that are wetlands which are not
14 For additional information, see CRS Issue Brief IB97014, Wetlands Issues, by Jeffrey
Zinn and Claudia Copeland.

---

CRS-12
physically adjacent to navigable surface waters often appear to provide only some of
the values for which wetlands are protected, such as flood control or water
purification, even if they meet the technical definition of a wetland. On January 9,
2001, the Supreme Court ruled on the question of whether the CWA provides the
Corps and EPA with authority over isolated waters. The Court’s 5-4 ruling in Solid
Waste Agency of Northern Cook County (SWANCC) v. U.S. Army Corps of Engineers
(531 U.S. 159 (2001)) held that the Corps’ denial of a 404 permit for a disposal site
on isolated wetlands solely on the basis that migratory birds use the site exceeds the
authority provided in the Act.
The full extent of impacts on the regulatory program resulting from this decision
remains unclear for now. Environmentalists believe that the Court misinterpreted
congressional intent on the matter, while industry and landowner groups welcomed
the ruling. Policy implications of how much the decision restricts federal regulation
depend on how broadly or narrowly the opinion is applied. Some federal courts have
interpreted SWANCC narrowly, thus limiting its effect on current permit rules, while
a few read the decision more broadly. The government’s current view on this key
question was expressed in EPA-Corps guidance issued in January 2003. It provides
a legal interpretation essentially based on a narrow reading of the Court’s decision,
thus allowing federal regulation of some isolated waters to continue, but it calls for
more headquarters review in disputed cases. Administration press releases say that
the guidance demonstrates the government’s commitment to “no-net-loss” wetlands
policy. However, it is apparent that the issues remain under discussion, because at
the same time, the Administration issued an advance notice of proposed rulemaking
(ANPRM) seeking comment on how to define waters that are under jurisdiction of
the regulatory program.15 The ANPRM did not actually propose rule changes, but it
indicated possible ways that Clean Water Act rules might be modified to further limit
federal jurisdiction, building on SWANCC and some subsequent legal decisions.
The government received more than 133,000 comments on the ANPRM, most
of them negative, according to EPA and the Corps. Environmentalists and many
states opposed changing any rules, saying that the law and previous court rulings call
for the broadest possible interpretation of the Clean Water Act (and thus a narrow
interpretation of SWANCC), but developers sought changes to clarify interpretation
of the SWANCC ruling. On December 16, 2003, EPA and the Corps announced that
the Administration will not pursue development of rule changes concerning federal
regulatory jurisdiction over isolated wetlands. The EPA Administrator said that the
Administration wanted to avoid a contentious and lengthy rulemaking debate over
the issue. Environmentalists and state representatives expressed relief at the
announcement. Interest groups on all sides have been critical of confusion in
implementing the 2003 guidance, which constitutes the main tool for interpreting the
reach of the SWANCC decision. Environmentalists remain concerned about
diminished protection resulting from the guidance, while developers said that without
15 U.S. Department of Defense, Department of the Army, Corps of Engineers and U.S.
Environmental Protection Agency. “Advance Notice of Proposed Rulemaking on the Clean
Water Act Regulatory Definition of ‘Waters of the United States’ and Joint Memorandum.”
68 Federal Register 1991-1998, Jan. 15, 2003.

---

CRS-13
new regulations, confusing and contradictory interpretations of wetland rules will
continue.
Congressional Actions. In September 2002, the House Government
Reform Subcommittee on Energy Policy, Natural Resources, and Regulatory Affairs
held a hearing on the government’s response to the SWANCC decision and to press
the government to clarify its interpretation of the Court case. Committee Members
and public witnesses indicated that a lack of guidance has led to inconsistent
regulatory decisions by Corps officials in individual regions of the country, and
subsequent judicial decisions by other federal and state court have been mixed. At
the hearing, Corps and EPA officials testified on their efforts to develop guidance,
which subsequently was released in January 2003. Concern about lingering
confusion over the SWANCC decision and its implementation by the Corps was the
topic of an oversight hearing by the Senate Environment and Public Works
Committee in June 2003. Developers and others in the regulated community
criticized the Corps and EPA, saying that the January 2003 guidance document had
not clarified the reach of federal jurisdiction. A House Transportation and
Infrastructure subcommittee also held a hearing on post-SWANCC issues on March
30, 2004.
While it continues to be difficult to fully assess how regulatory protection of
wetlands will be affected as a result of the SWANCC decision and other possible
changes, the remaining responsibility to protect affected wetlands falls on states and
localities.16
Controversies about the SWANCC guidance issued by EPA and the Corps in
2003 persist. In response, on May 18 the House adopted an amendment to a bill
providing FY2007 appropriations for EPA (H.R. 5386). The amendment (passed by
a 222-198 vote) would bar EPA from spending funds to implement the 2003 policy
guidance. Supporters of the amendment said that the guidance goes beyond what the
Supreme Court required in SWANCC, has allowed many streams and wetlands to be
unprotected from development, and has been more confusing than helpful.
Opponents of the amendment predicted that it would make EPA’s and the Corps’
regulatory job more difficult than it already is.
Legislation to overturn the SWANCC decision by providing a broad definition
of “waters of the United States” has been introduced in the 109th Congress (H.R.
1356, the Clean Water Authority Restoration Act of 2005). Other legislation to
narrow the definition of “waters of the United States” also has been introduced (H.R.
2658, the Federal Wetlands Jurisdiction Act of 2005).17
TMDLs and State Water Quality Standards. The CWA requires states
to identify pollution-impaired water segments and develop “total maximum daily
16 For additional information, see CRS Report RL30849, The Supreme Court Addresses
Corps of Engineers Jurisdiction Over ‘Isolated Waters’: The SWANCC Decision, by Robert
Meltz and Claudia Copeland.
17 For additional information and discussion of similar legislation in the 108th Congress, see
CRS Issue Brief IB97014, Wetland Issues, by Jeffrey A. Zinn and Claudia Copeland.

---

CRS-14
loads” (TMDL) that set the maximum amount of pollution that a water body can
receive without violating water quality standards. A TMDL is essentially a plan to
allocate responsibility for implementing pollution control measures within an area
or watershed in order to remedy water quality impairments. Until recently, there had
been little implementation of the TMDL provision (Section 303(d)), which Congress
enacted in 1972. Since the early 1990s, environmental groups have filed lawsuits in
40 states to pressure EPA and states to meet the law’s requirements. Of the suits
tried or settled to date, more than half have resulted in court orders requiring
expeditious development of TMDLs, thus driving the program that had previously
received little attention. At issue today are controversies over implementation of the
existing TMDL program and regulatory revisions that EPA issued in July 2000; the
2000 revisions were issued partly in response to the lawsuits and were intended to
strengthen the program. That rule was highly controversial (and never went into
effect) because of issues such as potential burdens on states, industries, cities, and
others to implement a revised TMDL program and potential impacts on some
agriculture and forestry sources, which are not now directly subject to CWA
regulations. Because of those controversies, the Clinton Administration delayed the
effective date of the 2000 rule until October 2001.
In the FY2001 appropriations act funding EPA, P.L. 106-377, Congress
requested a study by the National Academy of Sciences (NAS) on the scientific basis
of the TMDL program. The NAS report was issued in June 2001.18 It did not
specifically analyze the July 2000 revised regulations. The NAS panel concluded
that scientific knowledge exists to move forward with the TMDL program and
recommended that EPA and states use adaptive implementation for TMDL
development. In many cases, the report said, water quality problems and solutions
are obvious and should proceed without complex analysis. In other cases, solutions
are more complex and require a different level of understanding and something like
phased implementation. In addition, the General Accounting Office (now the
Government Accountability Office) concluded in a report that inconsistent
monitoring, data collection, and listing procedures used by states to identify impaired
waters have hindered efforts to develop effective TMDL programs.19
In October 2001, the Bush Administration announced that it would delay the
rule for 18 months (until May 2003) to allow EPA officials time to review the rule
and the NAS report. This action came after a federal court approved the
Administration’s request for a similar suspension of litigation that is challenging the
regulation (nearly a dozen interest groups have sued EPA over various parts of the
TMDL rule). In the interim and continuing for the present time, existing rules and
18 National Research Council, National Academy of Sciences. Assessing the TMDL
Approach to Water Quality Management. National Academy Press, Washington, DC. June
2001. 82 p.
19 U.S. Government Accountability Office. Water Quality: Inconsistent State Approaches
Complicate Nation’s Efforts to Identify Its Most Polluted Waters, GAO-02-186. January
2002. 41 p.

---

CRS-15
requirements and court-sanctioned TMDL schedules (affecting approximately 22
states) remain in place.20
On March 19, 2003, EPA withdrew the July 2000 TMDL rule. EPA officials
said that implementation of the existing TMDL program will continue in the
meantime, but that additional time is needed to decide whether and how to revise the
current program. EPA is considering initiating an entirely new rule or other options,
but no further timeframe or proposal has been announced. Recent congressional
attention to these issues has been limited to oversight hearings held by the House
Transportation and Infrastructure Subcommittee on Water Resources in June and
November 2001. The 109th Congress may examine implementation of existing
TMDL requirements and possible regulatory changes, if issued, in view of continuing
disagreement among states, cities, industry, and environmental advocates about
program effectiveness and efficiency.
Other Implementation Issues. Of potential legislative interest are the
impacts of recent court rulings in several cases concerning implementation of
existing provisions of the law and involving questions of whether certain activities
require a Clean Water Act discharge permit. A fundamental element of the act is the
requirement that the “discharge of a pollutant” from a point source shall be carried
out pursuant to a permit authorized by the National Pollutant Discharge Elimination
System (NPDES) program under Section 402 of the law. In 2004, the Supreme Court
held that the transfer of polluted water from one waterbody to another requires a
permit, notwithstanding that no new pollutant is added in the process of transfer
(South Florida Water Management District v. Miccosukee Tribe of Indians, 124 S.
Ct. 1537 (2004)).21 The decision has raised concerns in agricultural areas where such
transfers often occur in supplying irrigation water, presently without a permit.
Also, decisions of federal courts in two cases have held that aerial application
of a pesticide over and into U.S. waters requires a CWA permit, even when the
pesticide use meets other requirements of federal law, including the Federal
Insecticide, Fungicide, and Rodenticide Act (FIFRA). These and related decisions
drew the attention of many pesticide applicators, including public health entities such
as mosquito control districts, concerned with how the rulings might affect their need
to control pests associated with diseases such as the West Nile virus. In January
2005, EPA issued guidance seeking to resolve the conflict over the regulatory scope
of the CWA and FIFRA related to pesticide use, in light of the recent litigation, and
simultaneously proposed a formal rulemaking to promulgate regulations that would
clarify circumstances under which a CWA permit is or is not required for activities
carried out pursuant to FIFRA. Congress has examined these issues in oversight
hearings, one by a House Transportation and Infrastructure subcommittee in October
2002 and another by a House Government Reform subcommittee in October 2004.
Legislation intended to affirm that a CWA permit is not required for use of FIFRA-
approved pesticides has been introduced in the 109th Congress, the Pest Management
20 For additional information, see CRS Report 97-831, Clean Water Act and Total Maximum
Daily Loads (TMDLs) of Pollutants, by Claudia Copeland.
21 For information, see CRS Report RL32569, The Supreme Court Revisits the Environment:
Seven Cases Decided or Accepted in the 2003-2004 Term, by Robert Meltz.

---

CRS-16
and Fire Suppression Flexibility Act (H.R. 1749, S. 1269). A House Transportation
and Infrastructure subcommittee held a hearing on H.R. 1749 on September 29.22
For Additional Reading
National Research Council, National Academy of Sciences. Assessing the TMDL
Approach to Water Quality Management. National Academy Press,
Washington, DC. June 2001. 82 p.
U.S. Congressional Budget Office. Future Investment in Drinking Water and
Wastewater Infrastructure. Washington, November 2002. 58 p.
U.S. Environmental Protection Agency. The National Water Quality Inventory:
2000 Report. Washington, September 2002. “EPA-841-R-2-001.” 207 p.
——. The Clean Water and Drinking Water Infrastructure Gap Analysis.
Washington, September 2002. “EPA-816-R-02-020.” 50 p.
——. Clean Watersheds Needs Survey 2000, Report to Congress. Washington,
August 2003. “EPA-832-R-03-001.” 1 vol.
U.S. Government Accountability Office. Key EPA and State Decisions Limited by
Inconsistent and Incomplete Data. (GAO/RCED-00-54) March 2000. 73 p.
——. Water Infrastructure: Information on Financing, Capital Planning, and
Privatization. (GAO-02-764) August 2002. 79 p.
22 For background, see CRS Report RL32884, Pesticide Use and Water Quality: Are the
Laws Complementary or In Conflict? by Claudia Copeland.

---