Order Code IB10118
CRS Issue Brief for Congress
Received through the CRS Web
Safe Drinking Water Act:
Implementation and Issues
Updated May 3, 2006
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
The 1996 SDWA Amendments
Regulated Public Water Systems
Safe Drinking Water Issues
Regulating Drinking Water Contaminants
Recent and Proposed Rules
Methyl Tertiary Butyl Ether (MTBE)
Drinking Water Infrastructure Funding
Drinking Water State Revolving Fund
Drinking Water Security
Small Systems Issues
Small System Variances
Affordability Issues and Compliance
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
FOR ADDITIONAL READING
Safe Drinking Water Act: Implementation and Issues
Key drinking water issues in the 109th
Congress have included problems caused by
specific contaminants, such as methyl tertiary
butyl ether (MTBE) and perchlorate, as well
as the related issue of the appropriate federal
role in providing financial assistance for water
infrastructure projects. Congress last reauthorized the Safe Drinking Water Act (SDWA) in
1996, and although funding authority for most
SDWA programs expired in FY2003, broad
reauthorization bills have not been proposed,
as the Environmental Protection Agency
(EPA), states, and water systems remain busy
implementing the 1996 amendments.
The 107th Congress amended SDWA to
address concerns regarding the security of the
nation’s drinking water supplies. This act
included requirements for community water
systems to conduct vulnerability assessments
and prepare emergency response plans. In the
first session of the 109th Congress, S. 1426 was
introduced to require EPA to report to Congress on implementation of the water security
research provisions of the Bioterrorism Act.
An ongoing SDWA issue involves the
growing cost and complexity of drinking water
standards and the ability of water systems,
especially small systems, to comply with standards. The issue of the cost of drinking water
standards, such as the new arsenic standard, has
merged with the larger debate over the federal
role in assisting communities with financing
drinking water infrastructure — an issue that
has become more challenging in a time of
tightened government budgets.
In the first session of the 109th Congress,
Congress passed the Energy Policy Act of
2005 (P.L. 109-58, H.R. 6), which authorizes
appropriations from the Leaking Underground
Storage Tank Trust Fund specifically for EPA
and states to address releases of MTBE. It
also imposes new leak prevention requirements on EPA, states, and underground storage tank owners to better protect sources of
drinking water. Section 322 of the energy act
amended SDWA to preclude EPA from regulating the underground injection of fluids
(other than diesel fuel) into drinking water
sources for hydraulic fracturing purposes
related to oil, gas, and geothermal production.
Congress authorized a drinking water state
revolving fund (DWSRF) program in 1996 to
help communities finance projects needed to
comply with drinking water standards. For
FY2006, Congress provided $837.5 million for
this program. However, studies show that a
large funding gap exists and will grow as
SDWA requirements increase and infrastructure ages. The Senate Environment and Public
Works Committee has reported S. 1400, the
Water Infrastructure Financing Act, to increase
funding for the DWSRF program and a parallel
wastewater program, and to provide grant
assistance for small and rural communities.
Several other bills would establish a grant
program to help small communities comply
with drinking water standards and provide
greater compliance flexibility for small water
Concerns about perchlorate in drinking
water returned to the congressional agenda,
after the 108th Congress enacted several provisions on this issue. The House has passed
H.R. 18 and H.R. 186, which would establish
groundwater remediation programs in California, where most perchlorate contamination has
been identified. Other bills would direct EPA
to issue a SDWA standard for perchlorate.
Congressional Research Service
The Library of Congress
MOST RECENT DEVELOPMENTS
On December 8, 2005, the Senate Environment and Public Works Committee reported
S. 1400, the Water Infrastructure Financing Act (S.Rept. 109-186), to increase funding for
the drinking water state revolving fund (DWSRF) and the Clean Water SRF and to authorize
a grant program for small water systems and critical infrastructure projects. The Energy
Policy Act of 2005 (P.L. 109-58, H.R. 6), enacted August 8, 2005, amended SDWA to
exempt from regulation the underground injection of all fluids, except diesel fuel, into
underground sources of drinking water for hydraulic fracturing purposes related to oil, gas,
and geothermal production. (See CRS Report RL32873, Key Environmental Issues in the
Energy Policy Act of 2005 (P.L. 109-58, H.R. 6), coordinated by Brent D. Yacobucci.) The
energy act also authorizes appropriations from the Leaking Underground Storage Tank Trust
Fund to address releases of MTBE, and it imposes new leak prevention requirements on
EPA, states, and underground storage tank owners to better protect drinking water sources.
EPA’s FY2006 appropriations act (P.L. 109-54), enacted August 2, included $850 million
for the DWSRF program and $9 million for EPA’s Water Sentinel security initiative. After
applying two across-the-board rescissions applicable to EPA (a 0.476% rescission under P.L.
109-54 and a 1% rescission under P.L. 109-148, the Department of Defense FY2006
appropriations act), these amounts were $837.5 million and $8.1 million, respectively.
BACKGROUND AND ANALYSIS
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 SDWA defines as a state); 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, by Mary Tiemann.)
More than 90% of people in the United States get their drinking water from one of the
nearly 53,000 community water systems nationwide. Congress passed the SDWA in 1974,
after a nationwide study of community water systems revealed widespread water quality
problems and health risks resulting from poor operating procedures, inadequate facilities, and
poor management of water supplies in communities of all sizes. Since then, government and
private efforts to implement the act have led to better public water system management.
Significant progress has been made since the enactment of SDWA. 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 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 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 some159,000 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, 52,838 are community water systems (CWS) 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 18,650
public water systems are non-transient, non-community water systems (NTNCWS), 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 84,740 systems are transient non-community water systems (TNCWS)
(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 52,838 community water systems, roughly 84% serve 3,300 or fewer people.
While large in number, these systems provide water to just 9% of the population served by
all community systems. In contrast, 8% of community water systems serve more than 10,000
people, and they provide water to 81% of the population served. Fully 85% (16,545) of nontransient, non-community water systems and 97% (84,740) of transient noncommunity water
systems serve 500 or fewer people. These statistics give some insight into the scope of
financial, technological, and managerial challenges many public water systems face in
meeting a growing number of complex federal drinking water regulations. Table 1 provides
statistics for community water systems.
Table 1. Size Categories of Community Water Systems
Very small (25-500)
Very large (>100,000)
Source: Adapted from US Environmental Protection Agency, Factoids: Drinking Water and Ground Water
Statistics for 2004. Available at [http://www.epa.gov/safewater/data/pdfs/data_factoids_2004.pdf].
Safe Drinking Water Issues
Regulating Drinking Water Contaminants
Standard-Setting. The Safe Drinking Water Act directs EPA to promulgate a
National Primary Drinking Water Regulation for a contaminant if the Administrator
determines that (1) it may have adverse health effects, (2) it is likely to be present in public
water systems with a frequency and at levels of public health concern, and (3) its regulation
presents a meaningful opportunity for health risk reduction. The 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 may establish 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
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 generally sets
the MCLG at zero. Because MCLGs are based only on 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 (S.Rept. 104-169) 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 Proposed Rules. EPA’s recent rulemaking activities include a January
4, 2006, rule package (71 FR 387) that expands existing requirements to control pathogens,
especially Cryptosporidium (Long Term 2 Enhanced Surface Water Treatment Rule [LT2
rule]) and disinfectants (e.g., chlorine) and their byproducts (e.g., chloroform) (Stage 2
Disinfectant and Disinfection Byproduct Rule [Stage 2 DBP]). These rules complete a series
of statutorily mandated rules EPA has promulgated that impose increasingly strict controls
on the presences of pathogens and disinfectants and their byproducts in water systems.
(Information on the rules is available at [http://www.epa.gov/safewater/disinfection].) EPA
also has promulgated rules for several radionuclides, including revised radium standards
(effective December 2003), and a revised standard for arsenic (effective January 23, 2006).
EPA has nearly completed a rulemaking to establish disinfection requirements for
systems relying on ground waste. The groundwater rule, expected in August 2006, is
intended to protect against fecal bacteria contamination in these systems. EPA expects to
promulgate a radon rule in December 2006 and is evaluating many other contaminants,
including perchlorate and MTBE, for possible regulation.
Perchlorate. The key ingredient of solid rocket fuel, perchlorate is used heavily by
the Department of Defense (DOD), the National Aeronautics and Space Administration
(NASA), and related industries. It is also used in road flares, fireworks, and other products.
This highly soluble and persistent compound has long been disposed of on the ground, and
has been detected in sources of drinking water that serve more than 11 million people,
usually at low levels. Perchlorate is known to disrupt the uptake of iodine in the thyroid,
potentially affecting thyroid function. A key concern is that, if sufficiently severe, impaired
thyroid function in pregnant women can impair brain development in fetuses and infants.
EPA identified perchlorate as a candidate for regulation in 1998, but concluded that
information was insufficient at that time to make a regulatory determination. 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 that concluded that potential human health risks of perchlorate exposure include
effects on the developing nervous systems and thyroid tumors, based on rat studies that
observed benign tumors and adverse effects in fetal brain development. The draft assessment
included a revised draft reference dose (RfD) intended to protect the most sensitive groups
against these effects. That dose roughly translated to a drinking water standard of 1 part per
billion (ppb). EPA’s 1999 draft level translated to a standard of roughly 32 ppb.
Because an RfD provides the basis for determining the level at which a drinking water
standard is set, and because these standards are, in turn, the basis of environmental cleanup
standards, DOD and other perchlorate users and manufacturers have followed EPA’s efforts
closely. Interagency debate over the draft assessment persisted, and in March 2003, EPA, the
DOD, NASA, and other federal agencies asked the National Research Council (NRC) to
review the science for perchlorate and EPA’s draft risk assessment.
The NRC released its study in January 2005, and it broadly agreed with several EPA
findings; however, the NRC committee suggested several changes to EPA’s draft risk
assessment. Among other findings, the committee noted that, unlike rats, humans have
multiple mechanisms to compensate for iodide deficiency and thyroid disorders, and that
studies of rats are of limited use for assessing human health risk associated with perchlorate
exposure. The committee recommended that EPA base its assessment on human data. The
NRC calculated an RfD for perchlorate that incorporates an uncertainty factor to protect the
most sensitive populations; that is, RfD would translate to a drinking water equivalent level
of 24.5 ppb. (In developing an MCL, EPA would likely lower this number to reflect the
amount of perchlorate exposure that EPA determines comes from other sources, especially
food.) EPA has adopted the NRC’s recommended RfD but has not decided whether to set
a standard for perchlorate. (For further discussion, see CRS Report RS21961, Perchlorate
Contamination of Drinking Water: Regulatory Issues and Legislative Actions, by Mary
The House passed two bills that address perchlorate-contaminated groundwater in
California: H.R. 186 would authorize the Secretary of the Interior to make grants to the Santa
Clara Valley Water District for groundwater remediation projects, and H.R. 18 would
authorize grants for local water authorities within the Santa Anna River watershed. Among
other bills that have been introduced, H.R. 3053 would authorize the restoration of
perchlorate-contaminated groundwater in Eastern Santa Clara River Basin. Companion bills
H.R. 4798/S. 2298 would authorize grants for remediating California water supplies and
sources contaminated by perchlorate, authorize grants for developing perchlorate cleanup
technologies, and express the sense of Congress that EPA should set a drinking water
standard for perchlorate. H.R. 213 would require EPA to set a standard by July 31, 2007.
Methyl Tertiary Butyl Ether (MTBE). 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. At least 25 states, including California and New York, have
enacted limits or phase-outs of the additive. EPA has not developed a drinking water
standard for MTBE, but at least seven states have set their own MTBE 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 likely
to reach drinking water sources. EPA estimates that UST leaks involving MTBE can be two
to four times more costly to clean up than conventional gasoline leaks, which generally cost
from $100,000 to $125,000 to remediate.
Because of data gaps, EPA has not issued a health advisory or drinking water standard
for MTBE; however, EPA’s Office of Research and Development concluded in 1993 that the
inhalation evidence would support classifying MTBE as a “possible human carcinogen.”1
In 1997, EPA issued a drinking water advisory for MTBE based on consumer acceptability
(for taste and smell), because even small amounts of MTBE can render water undrinkable
because of its strong taste and odor. Advisories provide information on contaminants that are
not 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 stated at that time that keeping MTBE
levels in the range of 20-40 parts per billion or lower for consumer acceptability reasons
would also provide a large margin of safety from potential adverse health effects.
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. 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
planned to pursue research to fill data gaps so that a regulatory determination may be made.
However, most current MTBE research is focused on inhalation risks, and very little research
is being done specifically to assess the risks of exposure to MTBE via drinking water. The
next round of regulatory determinations is scheduled for 2006, although EPA can select
contaminants for regulation outside of this cycle.
The Energy Policy Act of 2005 (P.L. 109-58, H.R. 6) adds several new leak prevention
provisions to the UST regulatory program under the Solid Waste Disposal Act. It authorizes
an appropriation of $200 million from the LUST Trust Fund annually for six years,
specifically for addressing petroleum tank leaks involving MTBE or renewable fuels (e.g.,
U.S. Environmental Protection Agency, Health Risk Perspectives on Fuel Oxygenates, Office of
Research and Development, EPA 600/R-94/217, 1994, p. 8. See also, EPA’s MTBE risk assessment,
Assessment of Potential Health Risks of Gasoline Oxygenated with Methyl Tertiary Butyl Ether
(MTBE), EPA/600/R-93/206, 1993, [http://www.epa.gov/ncea/pdfs/mtbe/gasmtbe.pdf].
ethanol) and another $200 million annually for six years for EPA and states to administer the
general leaking petroleum tank cleanup program. The energy law’s UST provisions authorize
EPA and states to use LUST funds to enforce the new leak prevention provisions and
authorize Trust Fund appropriations for this purpose. However, the act’s motor fuels tax
language (which extends the LUST Trust Fund tax through March 2011) prohibits the use
of the trust fund for any new purposes. P.L. 109-58 does not ban MTBE, but it removes the
Clean Air Act oxygenated fuel requirement that prompted greater use of MTBE. A Senate
provision authorizing EPA to regulate the sale a motor fuel or additive if it caused water
pollution also was dropped in conference. (For details, see CRS Report RL32865, Renewable
Fuels and MTBE: A Comparison of Selected Provisions in the Energy Policy Act of 2005
(H.R. 6), by Brent D. Yacobucci, et al.; CRS Report RS21201, Leaking Underground
Storage Tanks: Program Status and Issues, by Mary Tiemann; and CRS Report RL32787,
MTBE in Gasoline: Clean Air and Drinking Water Issues, by James E. McCarthy and Mary
Of major concern to drinking water suppliers was the House version of H.R. 6, which
included a retroactive “safe harbor” provision to prohibit products liability lawsuits, alleging
manufacturing or design defects, against producers of fuels containing MTBE and renewable
fuels. The provision would not affect other liability (such as liability for cleanup costs or
negligence for spills). With liability ruled out for design defects, manufacturing defects, and
failure to warn of hazardous products, MTBE manufacturers would likely be more difficult
to reach under these other bases of liability. (For a discussion of legal issues, see CRS Report
RS21676, The Safe Harbor Provision for Methyl Tertiary Butyl Ether (MTBE), by Aaron M.
Flynn.) The safe harbor provision was opposed by many states, local government
organizations, and water suppliers. Opponents argued that a products liability shield would
effectively leave gas station owners liable for cleanup, and because these businesses often
have few resources, the burden for cleanup would fall to communities, water systems, the
states, and private well owners. Proponents argued that a liability safe harbor was merited,
given that MTBE has been used to meet federal Clean Air Act mandates, and that the key
problem was leaking tanks, not MTBE. The Senate bill included a safe harbor for renewable
fuels but not MTBE, and it was not retroactive. Unable to work out a broadly acceptable
compromise, conferees dropped the safe harbor provision from the legislation.
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
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.
Authorizations of appropriations for the DWSRF program totaled $9.6 billion, including
$1 billion for each of FY1995 through FY2003. Congress has provided nearly $8.6 billion
for this program, including roughly $843 million for FY2005 and $837.5 million for FY2006
(after applying two rescissions of 0.474% and 1%). Through June 2004, EPA had awarded
$5.74 billion in capitalization grants, which, when combined with the state match, bond
proceeds, and other funds, amounted to $9.64 billion in DWSRF funds available for loans
and other assistance. Through June 2004, 6,500 projects received assistance, and total
assistance provided by the program reached $7.98 billion. (See also CRS Report RS22037,
Drinking Water State Revolving Fund: Program Overview and Issues, by Mary Tiemann.)
Funding Issues. The DWSRF program is well regarded, but many organizations and
state and local officials argue that greater investment in water infrastructure is needed. EPA’s
2003 Drinking Water Infrastructure Needs Survey and Assessment concluded that systems
need to invest $276.8 billion in infrastructure improvements over 20 years to comply with
drinking water regulations and to ensure the provision of safe water. The survey includes
funds needed for compliance with several recent rules (including the arsenic rule and the
disinfectants and disinfection byproducts rules) and several proposed rules (e.g., radon). The
survey also identified $1 billion in security-related needs. All infrastructure projects in the
needs assessment promote the health objectives of the act, but only $45.1 billion (16.3%) of
the total need is attributable to SDWA compliance. Of this amount, $35.2 billion is needed
to address existing regulations, and $30.2 billion (86%) is needed for projects to address
microbiological contamination. Nearly two-thirds of the need ($183.6 billion) is for
transmission and distribution projects. Although aging deteriorated infrastructure often poses
a threat to drinking water safety, these needs are largely unrelated to federal mandates.
A related issue is the need for communities to address infrastructure costs that are
outside the scope of the DWSRF program and generally ineligible for such assistance.
Ineligible categories include future growth, ongoing rehabilitation, and system operation and
maintenance. Often, these basic infrastructure costs far exceed SDWA compliance costs.
In 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. In response to the Gap Analysis, EPA’s
budget request for FY2004 proposed that funding for the DWSRF program be continued at
a level of $850 million annually through FY2018. EPA’s budget justification explained that
this funding level 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.
Other assessments also have revealed a funding gap. In 2000, the Water Infrastructure
Network (WIN) (a coalition of state and local officials, water 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 proposed multibillion dollar investment programs for water infrastructure.
Others, however, have called for more financial self-reliance within the water sector.
Water infrastructure issues have received attention in the 109th Congress. The Senate
Environment and Public Works Committee has reported S. 1400, the Water Infrastructure
Financing Act (S. Rept 109-186). This bill would amend SDWA and the Clean Water Act
to reauthorize both SRF programs (authorizing $15 billion over five years for the DWSRF).
It also would direct EPA to establish grant programs for small or economically disadvantaged
communities for critical drinking water and water quality projects; authorize loans to small
systems for preconstruction, short-term, and small project costs; and direct EPA to establish
a demonstration program to promote new technologies and approaches to water quality and
water supply management. At markup, the committee adopted an amendment to apply DavisBacon prevailing wage requirements, in perpetuity, to projects receiving DWSRF assistance.
Action on similar legislation in the 108th Congress was stalled largely by such an amendment.
The Davis-Bacon measure remains contentious, and further action on S. 1400 is uncertain.
In the face of uncertainty over increased federal assistance for water infrastructure, EPA,
states, communities, 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. (For further discussion
of infrastructure issues, see CRS Report RL31116, Water Infrastructure Needs and
Investment: Review and Analysis of Key Issues, by Claudia Copeland and Mary Tiemann.)
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 (new
SDWA section 1433). The act also added sections 1434 and 1435, directing EPA to review
methods by which terrorists or others could disrupt the provision of safe water supplies and
to review methods for preventing, detecting, and responding to disruptions. Introduced in
the July 2005, S. 1426 would reauthorize appropriations for sections 1434 and 1435 and
require EPA to report to Congress on progress and problems with their implementation.
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 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 provide EPA with a copy of the assessment. The act also required the systems to
prepare or revise emergency response plans incorporating the results of the assessments no
later than six months after completing them. Table 2 outlines the deadlines by which
utilities had to submit their assessments to EPA and complete emergency response plans.
Table 2. Community Water System Requirements Under the
System size by population
(approx. no. of systems)
Emergency response plans
100,000 or more (425)
March 31, 2003
September 30, 2003
50,000 - 99,999 (460)
December 31, 2003
June 30, 2004
3,301 - 49,999 (7,500)
June 30, 2004
December 31, 2004
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 security
planning, and $5 million for state grants for assessing drinking water safety. In FY2002, EPA
awarded roughly $53 million in grants to help the largest systems complete vulnerability
assessments by the March 31, 2003 deadline. Essentially all systems met that deadline.
Federal grants were not available for 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 also has been provided for the
remaining 84% of community water systems that serve 3,300 or fewer and were 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 water security. P.L. 108-7 included this amount, plus $2 million for
the National Rural Water Association to help small systems with vulnerability assessments,
and $1 million to the American Water Works Association to provide 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
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 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.
For FY2005, EPA requested $5 million for state water security grants and $6.1 million
for other critical infrastructure protection efforts (including $2 million for the Water
Information Sharing and Analysis Center, which shares sensitive security information with
water systems). EPA noted that the $21.3 million reduction reflected a shift in priorities
from assistance for vulnerability assessments. P.L. 108-447 provided the requested amount.
The President requested $5 million for state water security grants for FY2006. The
request also included $44 million for a new water security initiative, Water Sentinel, in
response to EPA’s water security responsibilities under Homeland Security Presidential
Directive (HSPD) 7, that designated EPA as the lead agency for water infrastructure security.
The goal of the Water Sentinel initiative is to establish pilot early warning systems in several
cities through water monitoring and surveillance for chemical and biological contaminants,
and to build the analytical capacity to support the surveillance program. For this initiative,
EPA’s FY2006 appropriations bill (P.L. 109-54) included $8.1 million, after rescissions. In
H.Rept. 109-80, the House Appropriations Committee urged EPA to develop clear goals for
the Water Sentinel program and justify the request more clearly for FY2007. Congress also
provided $5 million ($4.93 after rescissions) for state water security grants.
The FY2007 budget request includes $41.7 million for the Water Sentinel Program,
which EPA views as an essential component of its water security activities. The request also
includes $4.95 for state water security grants. (See also CRS Report RL31294, Safeguarding
the Nation’s Drinking Water: EPA and Congressional Actions, by Mary Tiemann.)
Small Systems Issues
A key SDWA issue involves the financial, technical, and managerial capacity of small
systems to comply with SDWA regulations. Some 84% (44,000) of the nation’s 52,800
community water systems are small, serving 3,300 persons or fewer, and 57% of the systems
serve 500 persons or fewer. Many small systems face challenges in complying with 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 managerial and technical capabilities.
Although these systems serve just 9% of the population served by community water systems,
the sheer number of small systems has created challenges for policymakers.
In the earliest SDWA debates, Congress recognized that setting standards based on
technologies 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 help systems
develop and maintain the technical, financial and managerial capacity to meet SDWA
regulations. Congress also revised provisions on standard-setting (§1412(b)), variances
(§1415(e)), and exemptions (§1416) to increase consideration of small system concerns.
Small System Variances. Since 1996, the SDWA has required 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 have been available. However, several
recent rules (such as the arsenic and radium rules and the Stage 2 Disinfectants and
Disinfection Byproducts Rule [DBP]) have caused growing concern that EPA is not using
the tools Congress provided in the 1996 amendments to help small systems comply with
SDWA regulations. As discussed below, EPA currently is reevaluating its affordability
criteria. Based on this reevaluation, EPA may authorize states to grant small system
variances for the Stage 2 DBP, which EPA published on January 4, 2006.
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
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).
However, because of the administrative burden to the state, the exemption authority may not
be widely used. As of late 2004, 13 states had indicated that they would use the exemptions
process for the arsenic rule. However, because the exemption process is resource-intensive
for states, it is unclear whether states will use this authority with much frequency.
Affordability Issues and Compliance. Prompted by intense debate over the
revised arsenic standard and its potential cost to small communities, the conference report
for EPA’s FY2002 appropriations (H.Rept. 107-272) directed EPA to review its affordability
criteria and how small system variance and exemption programs should be implemented for
arsenic. Congress directed EPA to report on 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, summarized
actions EPA was undertaking to address these directives. Major 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. In 2002, EPA issued Implementation
Guidance for the Arsenic Rule, which includes guidance to help states grant exemptions.
EPA has offered technical assistance to small systems and has sponsored research on lowcost treatment technologies for arsenic. Also, EPA is working with small communities to
maximize loans and grants under SDWA and the U.S. Department of Agriculture water
infrastructure programs. For information on USDA and other assistance programs, see CRS
Report RL30478, Federally Supported Water Supply and Wastewater Treatment Programs.
Congress continues to express concern about the cost to communities to comply with
the arsenic rule, which is now in effect. The conference report for the Consolidated
Appropriations Act for FY2005 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. Congress also
provided $8.3 million for research on cost-effective arsenic removal technologies.
On March 3, 2006, EPA proposed three options for revising its affordability criteria for
determining whether a compliance technology is unaffordable for small systems (71 Federal
Register 10671). States could use the criteria to grant small-system variances when systems
cannot afford to comply with a standard. Using the current draft criteria, EPA considers a
technology affordable unless the average compliance cost exceeds 2.5% of the area’s median
household income, and to date, EPA has determined that affordable technologies are
available for all SDWA standards. The three proposed options are well below that level
(0.25%, 0.50%, and 0.75%). The revised criteria are also expected to address how to ensure
that a variance technology would be protective of public health. According to EPA, the final
criteria would apply only to EPA’s newly promulgated Stage 2 DBP and future rules.
In the 109th Congress, various bills have been introduced to help small systems comply
with the arsenic rule and other rules. S. 41 and H.R. 1315 would direct states to grant
qualified small water systems exemptions for naturally occurring contaminants. H.R. 4495
would give small systems two more years to comply with the arsenic rule. S. 2161 would
prevent the enforcement of drinking water regulations for small systems unless EPA has
identified a variance technology and sufficient DWSRF funds are made available. S. 2161
would further establish new affordability criteria for treatment technologies. Companion bills
H.R. 2417 and S. 689 would require EPA to establish a small system grant program to help
qualified communities comply with standards, delay state enforcement of the arsenic rule
until states implement the grant program, and prevent EPA from enforcing a standard during
the grant application process. S. 1400 would increase SRF funding and create a grant
program for priority projects, including projects to help small systems comply.
P.L. 109-58, H.R. 6 (Barton)
The Energy Policy Act of 2005, §322, amends SDWA to exempt from regulation the
underground injection of fluids (except diesel fuel) into underground sources of drinking
water for hydraulic fracturing purposes related to oil, gas, and geothermal production. Signed
into law on Aug. 8, 2005.
P.L. 109-307, H.R. 3058 (Knollenberg)
FY2006 appropriations act for the Departments of Transportation, Treasury, and
Housing and Urban Development, the Judiciary, District of Columbia, and Independent
Agencies. Directs the Secretary of the Treasury to submit a report to Congress that provides
the legal basis for applying arbitrage bond rules to reserve funds held by the clean water SRF
and DWSRF that generally contain replacement proceeds, not bond proceeds. Senate agreed
to amendment (S.Amdt. 2162 [Reed]) on Oct. 20, 2005; bill signed into law Nov. 30, 2005.
H.R. 213 (Solis)
Amends SDWA to require EPA to issue a standard for perchlorate by July 31, 2007.
Introduced Jan. 4, 2005; referred to the Committee on Energy and Commerce.
H.R. 1315 (Otter)
Amends SDWA to require states to grant temporary exemptions to small water systems
from the requirements of regulations for naturally occurring contaminants (e.g., arsenic and
radium). Introduced March 15, 2005; referred to the Committee on Energy and Commerce.
H.R. 1540 (Miller, Gary)
Amends SDWA civil suit provisions to establish liability standards for public water
systems regarding damages arising from injuries allegedly caused by the delivery of water
containing regulated or unregulated contaminants. Introduced April 8, 2005; referred to the
Committee on Energy and Commerce, and the Committee on the Judiciary.
H.R. 1679 (Andrews, Robert E.)
Authorizes supplemental appropriations for the DWSRF of $85 million for state
expenses of formulating source water assessment programs; specifies that the programs must
include the assessment of specified pesticides, surface water sources, residential wells, and
contaminated soil. Introduced April 19, 2005; referred to the Committee on Appropriations.
H.R. 2417 (Wilson, H.)/S. 689 (Domenici)
Amends SDWA to direct EPA to establish a program to provide grants to eligible
communities for projects needed to comply with drinking water standards; authorizes
funding at $1.9 million annually for six years; provides temporary relief from enforcement
of standards during the grant application process; delays state enforcement of the arsenic rule
until the state implements the grant program. H.R. 2417 was introduced May 17, 2005;
referred to the Committee on Energy and Commerce. S. 689 was introduced April 4, 2005;
referred to the Committee on Environment and Public Works.
H.R. 3178 (Norton)/S. 1328 (Jeffords)
Amends SDWA to require EPA to revise the lead regulation, establish an enforceable
standard for lead, and revise monitoring requirements; authorizes appropriations for a lead
service line replacement fund; reduces the amount of lead allowed in plumbing; and requires
EPA to issue rules for testing and remediating lead in school drinking water. H.R. 3178 was
introduced June 30, 2005; referred to the Committee on Energy and Commerce. S. 1328 was
introduced June 29, 2005; referred to the Committee on Environment and Public Works.
H.R. 4198 (Andrews)
Amends SDWA provisions requiring EPA to conduct studies on the health effects of
drinking water contaminants on sensitive subpopulations (e.g., infants and children) to
require that the studies include an evaluation of morbidity and endocrine disruptors; amends
reporting requirements to require EPA to ensure that related reports to Congress include
statistics on health effects as determined by rates of occurrence by age and gender.
Introduced November 2, 2005; referred to the Committee on Energy and Commerce.
H.R. 4495 (Renzi)
Amends SDWA to direct EPA to extend by two years the compliance date for the
arsenic rule for public water systems serving 65,000 or fewer persons. Introduced Dec. 8,
2005; referred to the Committee on Energy and Commerce.
H.R. 4798 (Pombo)/S. 2298 (Feinstein)
Authorizes grants to remediate California water supplies and sources contaminated by
perchlorate; establishes a California Perchlorate Cleanup Fund in the Treasure; authorizes
grants for developing perchlorate cleanup technologies; and expresses the sense of Congress
that EPA should establish a perchlorate drinking water standard. Both bills were introduced
Feb. 16, 2006. H.R. 4798 was referred to the Committee on Transportation and
Infrastructure, Subcommittee on Water Resources and Environment. S 2298 was referred
to the Committee on Environment and Public Works.
S. 41 (Nelson, E. Benjamin)
Amends SDWA to direct states to grant small, nonprofit water systems exemptions
from drinking water regulations for naturally occurring contaminants, in certain cases.
Introduced January 24, 2005; referred to the Committee on Environment and Public Works.
S. 837 (Inhofe)
Amends SDWA to exempt hydraulic fracturing related to oil and gas production from
the definition of underground injection and, thus, exclude this practice from potential
underground injection regulations related to the protection of underground sources of
drinking water. (Similar to H.R. 6, Section 322.) Introduced April 18, 2005; referred to the
Committee on Environment and Public Works.
S. 1080 (Jeffords)
Amends SDWA to prohibit the use of diesel fuel and other toxic substances for
hydraulic fracturing practices related to oil and natural gas production. Introduced May 19,
2005; referred to the Committee on Environment and Public Works.
S. 1400 (Chafee)
The Water Infrastructure Financing Act amends SDWA and the Clean Water Act to
amend and reauthorize both SRF programs; direct EPA to establish grant programs for small
or economically disadvantaged communities for critical drinking water and water quality
projects; authorize loans to small water and wastewater systems for preconstruction and
small project costs; require a study of the availability of no- and low-lead plumbing
components; authorize funding for lead service line replacement in the District of Columbia;
direct EPA to establish a grant program to promote new technologies and approaches to
water quality and supply management; authorize an agricultural pollution control grant
program; and for other purposes. Introduced July 14, 2005; referred to the Committee on
Environment and Public Works; reported, amended, Dec. 8, 2005 (S.Rept. 109-186).
S. 1409 (Murkowski)
Amends and reauthorizes Section 303 of the 1996 SDWA Amendments to authorize
EPA to make grants to Alaska to pay 75% of the cost of water and wastewater systems for
rural and Native villages in Alaska. Introduced July 14, 2005; referred to the Committee on
Environment and Public Works; reported, amended, October 24, 2005 (S.Rept. 109-159).
S. 1426 (Obama) Amends SDWA to reauthorize appropriations for water security
Sections 1334 and 1435 regarding contaminant prevention, detection, and response, and to
require a report to Congress on progress and problems in implementing these provisions.
Introduced July 19, 2005; referred to the Committee on Environment and Public Works.
S. 1836 (Jeffords)
The Gulf Coast Infrastructure Redevelopment and Recovery Act, § 304, amends SDWA
to temporarily grant states authority to provide DWSRF funding for water system projects
that are not on the state priority list to address hurricane damage. Introduced Oct. 6, 2005;
referred to the Committee on Environment and Public Works.
S. 2161 (Inhofe)
Amends SDWA to prevent enforcement of certain drinking water regulations for small
systems unless sufficient funding is available or EPA has identified small system variance
technologies; establishes new affordability criteria for treatment technologies. Introduced
December 21, 2005; 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 Cong., 2nd
sess. 155 p. (H.Rept. 108-97).
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 Cong., 2nd sess. 268 p. (H.Rept. 108-161).
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, October 14, 2003, 108th Cong., 1st sess. 201p. (H.Rept. 108-157).
U.S. Congress. House. Committee on Transportation and Infrastructure. Subcommittee on
Water Resources and Environment. Aging Water Supply Infrastructure. Hearing, April
28, 2004, 108th Cong., 2nd sess. 78 p. (H.Rept. 108-63).
U.S. Congress. Senate. Committee on Environment and Public Works. Water Infrastructure
Financing Act. Report to accompany S. 2550. Oct. 7, 2004. 116 p. (S.Rept. 108-386).
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. Environmental Protection Agency. Providing Safe Drinking Water in America: 2002
National Public Water Systems Compliance Report. Report No. EPA 305-R-04-001.
Dec. 2004. 96 p.
National Research Council. Health Implications of Perchlorate Ingestion. Board on
Environmental Studies and Toxicology. National Academies Press. Jan. 2005. 177 p.