Water Infrastructure Financing Legislation: Comparison of S. 2550 and H.R. 1560

Water Infrastructure Financing Legislation: Comparison of S. 2550 and H.R. 1560

Order Code RL32503
CRS Report for Congress
Received through the CRS Web
Water Infrastructure Financing Legislation:
Comparison of S. 2550 and H.R. 1560
July 27, 2004
name redacted and name redacted
Specialists in Environmental Policy
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

Water Infrastructure Financing Legislation:
Comparison of S. 2550 and H.R. 1560
Summary
This report provides a side-by-side comparison of two major bills in the 108th
Congress concerning water infrastructure project financing. It compares provisions
of S. 2550, the Water Infrastructure Financing Act, which would amend the Clean
Water Act (CWA) and the Safe Drinking Water Act (SDWA), and H.R. 1560, the
Water Quality Financing Act of 2003, which would amend only the CWA. H.R. 1560
was approved by a House Transportation and Infrastructure subcommittee on July 17,
2003; S. 2550 was approved by the Senate Environment and Public Works
Committee on June 23, 2004.
The CWA and SDWA provisions in these two bills principally involve the
portions of those laws that authorize federal financial assistance to State Revolving
Loan Funds (SRFs) for purposes of building and upgrading wastewater treatment and
drinking water treatment facilities. Congress established the CWA SRF program in
1987 and the SDWA SRF program in 1996. Under both, federal capitalization grants
are provided as seed money for state-administered loan programs. Communities
repay loans to the state, providing a source of capital for future loans and other
investments. Both laws contain provisions that specify requirements for states to
establish SRFs and requirements that apply to the SRF’s operation, such as plans and
reporting. Both define categories of projects eligible for assistance, who may receive
assistance, and types of assistance activities.
A key intention of both bills is to extend SRF authorizations. S. 2550 authorizes
$35 billion for FY2005-FY2009 for capitalization grants ($20 billion for the CWA
SRF, $15 billion for the SDWA SRF). H.R. 1560 authorizes $20 billion for CWA
SRF capitalization grants for FY2004-FY2008. In addition, both would conform the
two laws in several respects. For example, the SDWA currently allows states to offer
additional subsidization to disadvantaged communities and longer loan repayment
periods, and both bills would add similar provisions to the CWA.
The bills are not identical, however. In some cases, they take different
approaches to an issue, such as how to revise the formula for state-by-state allotment
of CWA SRF capitalization grants. S. 2550 includes provisions that would apply
prevailing wage requirements of the Davis-Bacon Act to projects that receive SRF
funding, and it includes a new grant program to assist small community drinking
water projects, as well as grant programs to address lead contamination in schools
and in the District of Columbia. H.R. 1560 includes provisions requiring
communities to plan for capital replacement needs and to implement an asset
management plan for the repair and maintenance of infrastructure.
Future prospects for the legislation are uncertain for several reasons, including
controversies over application of the Davis-Bacon Act, Administration opposition
to funding levels in the bills, limited legislative time remaining in the 108th Congress,
and the lack of House consideration of a counterpart to the SDWA provisions of S.
2550. This report will be updated as warranted.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Table 1. Comparison of Water Infrastructure Legislation . . . . . . . . . . . . . . . . . . 5
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Recipients Eligible for Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Projects Eligible for Assistance, Types of Assistance . . . . . . . . . . . . . . 6
SRF Grants Set-Aside Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Fund Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Extension of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Additional Subsidization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Financial Assistance to Small Systems from the SRF . . . . . . . . . . . . . 10
Technical Assistance to Small Systems from the SRF . . . . . . . . . . . . 11
Technical Assistance Grants for Rural and Small Treatment Works . 11
State Administrative Costs Set-Aside . . . . . . . . . . . . . . . . . . . . . . . . . 12
Reservation of Funds for Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Cross-Cutting Requirements; Labor Standards . . . . . . . . . . . . . . . . . . 13
Requirements for Receipt of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Priority System Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Allotment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SRF Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Cross-Collateralization between CWA and SDWA SRFs . . . . . . . . . 18
SRF Set-Aside for Indian Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SRF Review Process — Assistance for Accessing the SRF . . . . . . . . 19
Reports: Needs Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Removal of Lead from Drinking Water in Schools . . . . . . . . . . . . . . . 20
Lead Contamination in Drinking Water in the District of Columbia . 21
Small Public Water System Grant Program . . . . . . . . . . . . . . . . . . . . . 22
Pilot Program for Alternative Water Source Projects . . . . . . . . . . . . . 25
Sewer Overflow Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Watershed Pilot Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
National Estuary Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Sewage Control Technology Grant Program . . . . . . . . . . . . . . . . . . . . 27
Demonstration Program for Water Quality Enhancement
and Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Southeast Colorado Safe Drinking Water Supply . . . . . . . . . . . . . . . . 28
Environmental Finance Centers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Cost of Service Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Assessment of Perchlorate Contamination . . . . . . . . . . . . . . . . . . . . . 31
Special Water Resources Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Water Infrastructure Financing Legislation:
Comparison of S. 2550 and H.R. 1560
Introduction
This report provides a side-by-side comparison of two major bills in the 108th
Congress concerning water infrastructure project financing. It compares provisions
of S. 2550, the Water Infrastructure Financing Act, which would amend both the
Clean Water Act (CWA, 33 U.S.C. 1251 et seq.) and the Safe Drinking Water Act
(SDWA, 42 U.S.C. 300f et seq.), and H.R. 1560, the Water Quality Financing Act
of 2003, which would amend only the CWA. While a number of bills that address
water infrastructure project financing have been introduced, these two measures are
the focus of legislative activity in the 108th Congress. This report also describes
relevant provisions of current law that would be affected or modified by the bills.
The CWA and SDWA provisions that these two bills would amend are
principally the portions of those laws that authorize federal financial assistance to
State Revolving Loan Funds (SRFs) for purposes of building and upgrading
wastewater treatment and drinking water treatment facilities, respectively. At the
federal level, the SRF programs in the laws are administered by the Environmental
Protection Agency (EPA). Under the programs in both laws, federal capitalization
grants are provided as seed money for state-administered loan programs. Recipients
repay loans to the state, enabling the state to build up a source of capital for future
loans and other investments. Thus, monies in the SRF consist of federal
capitalization grants from congressional appropriations, required state matching
funds (20% of a capitalization grant), and loan repayments. Congress established the
CWA SRF program in 1987 (P.L. 100-4), replacing what previously had been a
CWA program of grants to municipalities. Before 1996, the SDWA had not
authorized federal assistance for drinking water treatment facilities, but in that year,
Congress established the SDWA SRF program (P.L. 104-182), modeling it after the
CWA program, while also refining it to reflect experiences gained during the early
implementation of P.L. 100-4. (For background information, see CRS Report
RL31116, Water Infrastructure Funding: Review and Analysis of Current Issues.)
A key intention of both of the current bills is to extend and increase SRF
authorizations, because estimates by states and EPA of funding needed by wastewater
and water utilities to comply with the two acts exceed $330 billion. Needs estimates
by other groups are even higher. In the case of the CWA program, authorizations
under the 1987 law expired at the end of FY1994, while authorizations for the
SDWA SRF program expired at the end of FY2003. However, Congress has
continued to appropriate monies for capitalization grants each year for both since
their authorizations expired.

CRS-2
More recently, legislative activity concerning water infrastructure issues has
been undertaken in the 107th and 108th Congresses. House and Senate committees
held oversight hearings on water infrastructure financing issues during the first
session of the 107th Congress, and in the second session, the House Transportation
and Infrastructure Committee approved H.R. 3930. No committee report was filed.
The Senate Environment and Public Works Committee approved and reported
infrastructure financing legislation (S. 1961, S.Rept. 107-228).1 No further action
occurred on either bill, in large part due to controversies over provisions in both bills
to apply requirements of the Davis-Bacon Act to SRF-funded water infrastructure
projects2 and also over grant allocation formulas in the two measures.
In the 108th Congress, the House Transportation and Infrastructure
Subcommittee on Water Resources and Environment approved H.R. 1560, legislation
similar to H.R. 3930 from the 107th Congress, in July 2003. H.R. 1560 would
authorize $20 billion for the clean water SRF program for FY2004-FY2008. It
contains several provisions intended to benefit economically disadvantaged and small
communities, such as allowing extended loan repayments (30 years) and additional
subsidies, including forgiveness of the loan principal 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. The full committee has not acted on the subcommittee-
approved bill.
On June 23, 2004, the Senate Environment and Public Works Committee
approved S. 2550. It authorizes $41.25 billion over five years for wastewater and
drinking water infrastructure programs, including $20 billion for the clean water SRF
program and $15 billion for the drinking water SRF program. The bill includes a new
formula for state-by-state allocation of clean water SRF grants, expansion of the
types of projects and activities eligible for SRF funding, and renewal of several Clean
Water Act grant programs (for sewer overflow control projects, alternative water
source pilot projects, and the National Estuary Program). It includes several
provisions to conform administrative elements of the two laws’ SRF programs (such
as amounts reserved for state administrative costs). The Senate bill directs states to
reserve a portion of their annual clean water and drinking water SRF capitalization
grants for making grants to eligible communities, and further requires EPA to
establish a small drinking water system grant program to help small water systems
1 For information, see CRS Report RL31344, Water Infrastructure Financing Legislation:
Comparison of S. 1961 and H.R. 3930.
2 The Davis-Bacon Act requires, among other things, that not less than the locally prevailing
wage be paid to workers employed, under contract, on federal construction work “to which
the United States or the District of Columbia is a party.” Critics say that it unnecessarily
increases public construction costs and hampers competition. Supporters say that the law
helps stabilize the local construction industry by preventing competition that could undercut
local wages and working conditions. Congress has added Davis-Bacon prevailing wage
provisions to more than 50 separate program statutes, including the Clean Water Act. For
background, see CRS Report RL31491, Davis-Bacon Act Coverage and the State Revolving
Fund Program Under the Clean Water Act.

CRS-3
comply with drinking water regulations.3 Among other provisions, the bill authorizes
funds to address lead contamination in schools and in the District of Columbia, and
directs the U.S. Geological Survey to assess perchlorate contamination nationwide.
S. 2550 also amends the Water Resources Planning Act to require the Water
Resources Council to conduct a special water resources study.
The House and Senate bills differ in a number of respects. In some cases, they
take different approaches to an issue, such as how to revise the formula for state-by-
state allotment of CWA SRF capitalization grants. They differ in other ways as well.
! S. 2550, but not H.R. 1560, includes provisions modeled on the
current SDWA that would allow private utilities to receive CWA
SRF assistance.
! Both bills would permit states to make longer-term SRF loans. H.R.
1560 generally would permit loans to be made for up to 30 years,
while S. 2550 (adopting the current SDWA approach) extends clean
water SRF loans made to disadvantaged communities from 20 years
to up to 30 years.
! The House bill addresses several issues not included in the Senate
measure. It would, for example, authorize states to use the clean
water SRF to provide technical assistance to small treatment works;
require aid recipients to conduct additional project evaluations,
including of the cost and effectiveness of innovative and alternative
processes and techniques; and reauthorize the existing Sewer
Overflow Grant program in Section 121 of the Clean Water Act.
! The Senate bill also has several provisions not contained in H.R.
1560, including a cost of service study by the National Academy of
Sciences, a nationwide demonstration program for innovations in
water quality management or water supply, and a study of lead in
drinking water by the National Academy of Sciences.
! Unlike the House bill, S. 2550 includes language that would apply
prevailing wage requirements of the Davis-Bacon Act to projects
that receive funding in whole or in part from a CWA or SDWA
SRF.
Future prospects for H.R. 1560 and S. 2550 are uncertain for several reasons.
First, the Administration opposes the higher SRF funding levels contained in both
bills. Second, strong disagreement exists in both houses of Congress over including
provisions to apply requirements of the Davis-Bacon Act to SRF-funded projects, as
well as over the state-by-state allotment formula in S. 2550 for Clean Water Act
capitalization grants. Similar disagreements were largely responsible for the lack of
final action on water infrastructure legislation in the 107th Congress. Third, only a
limited number of legislative days remain in the 108th Congress. Fourth, the House
3 During markup of S. 2550, the Senate Environment and Public Works Committee approved
two similar amendments to establish a small drinking water system grant program. Although
the programs contain many similarities, they would authorize grant funding at significantly
different levels. See discussion of “Small Public Water System Grant Program” in this
report.

CRS-4
Energy and Commerce Committee, which has jurisdiction over the Safe Drinking
Water Act, has not yet considered counterpart legislation to the SDWA provisions
in S. 2550.
Several other legislative proposals dealing with water infrastructure financing
programs administered by EPA, not described in this report, also have been
introduced in the 108th Congress. These include:
! H.R. 688/S. 252, to authorize $15 billion in CWA SRF
appropriations and expand the types of projects eligible for CWA
SRF assistance;
! H.R. 768/S. 567, to authorize appropriations for the sewer overflow
grant program in CWA Section 221 (the House Transportation and
Infrastructure Committee approved an amended version of H.R. 768
on July 21, 2004);
! H.R. 2804, to authorize a supplemental appropriation of $85 million
for the SDWA SRF and to require that state source water assessment
programs address specified pesticides;
! H.R. 3328/S. 1432, to authorize $1.9 billion for each of FY2004-
FY2009 for grants to assist small communities and certain other
communities in complying with drinking water regulations;
! H.R. 3792, to authorize $25 billion in appropriations for CWA SRFs
and expand the types of eligible projects;
! H.R. 4268/S. 2377, to authorize $200 million for each of FY2005-
FY2009 to replace lead service lines in public water systems, and to
strengthen the regulation of lead in drinking water;
! H.R. 568/S. 827, to provide CWA assistance through grants to states
in the Chesapeake Bay watershed for installing nutrient removal
technologies at wastewater treatment plants; and
! S. 1413, to authorize appropriations for the drinking water SRF for
FY2004 at $2 billion, and to authorize feasibility studies for specific
water quality and supply projects.

CRS-5
Table 1. Comparison of Water Infrastructure Legislation
Current Law
S. 2550
H.R. 1560
Definitions
Clean Water Act (CWA) general
No new general definitions.
Defines “small treatment works” as
definitions are provided in §502.
those serving a population of 20,000 or
fewer. (Section 307 of H.R. 1560)
CWA §212 defines “treatment works”
Adds definition of “treatment works” to
and other terms for Title II construction
CWA §502 (references the §212
grants program.
definition). (Section 401)
Amends §212 definition of “treatment
works” to include land acquisition and
interest in lands necessary for
construction. (Section 202)
Safe Drinking Water Act (SDWA)
No new general definitions.
No provision.
definitions generally are provided in
§1401.
Recipients Eligible for Assistance
CWA §603(c) provides that eligible
Amends §603(c) to add private utilities
No comparable provision.
assistance recipients include any
that principally treat municipal
municipality, intermunicipal, interstate,
wastewater or domestic sewage as
or state agency.
eligible recipients for CWA State
Revolving Fund (SRF) assistance.
(Section 102 of S. 2550)
SDWA §1452(a) and (f) provide that
No additional provisions.
No provision.
eligible assistance recipients include
privately or publicly owned community
water systems and nonprofit
noncommunity water systems, other
than systems owned by federal
agencies.

CRS-6
Current Law
S. 2550
H.R. 1560
Projects Eligible for Assistance, Types of Assistance
CWA §603(c) describes types of
Modifies §603(c) to clarify that costs for
No comparable language for costs of
projects eligible for financial assistance
planning, design, associated
planning, design, and preconstruction
(construction of publicly owned
preconstruction, and necessary siting
activities.
treatment works, implementation of a
activities are eligible for assistance.
§319 nonpoint pollution management
program, and development and
Adds water conservation projects or
Adds lake protection projects (CWA
implementation of a §320 estuary
activities for eligibility.
§314), repair and replacement of
conservation and management plan).
decentralized wastewater treatment
Also adds water reuse, reclamation or
systems, municipal stormwater runoff
recycling projects; projects to increase
measures, water conservation, treatment
facility security; and measures to control
works security measures, watershed
municipal stormwater to list of types of
development and implementation
eligible projects, but private utilities may
projects (CWA §121) to list of eligible
not use SRF funds for such projects.
projects. (Section 303(a))
(Section 102)
CWA §603(d) defines types of
Amends §603(d) to add projects for
No comparable provision.
assistance that SRF may be used for,
implementation of nonpoint source
e.g., making loans, providing loan
pollution management or estuarine
guarantees, buying or refinancing debt
conservation management and allows
obligations of municipalities.
loans for such projects to have 30-year
amortization period. (Section 103)
SDWA §1452(a)(2) states that funds
Expands §1452(a)(2) to allow water
No provision.
may be used only for expenditures that
systems to use funds for planning,
the Administrator has determined will
design, and associated preconstruction
facilitate compliance with SDWA
expenditures and recovery of facility
regulations or significantly further
siting costs, and for projects to replace or
SDWA’s health protection objectives.
rehabilitate aging water infrastructure
(including reservoirs). Funds may also
§1452(k) authorizes states to use up to
be used for capital projects to upgrade
15% of the capitalization grant (not
the security of public water systems.
more than 10% for any 1 activity) to
(Section 203)
provide loans to public water systems
for acquiring conservation easements
Amends §1452(k)(2) to broaden other
or land for source water protection; to
eligible uses of SRF funds to include

CRS-7
Current Law
S. 2550
H.R. 1560
provide loans to community water
implementation of source water
systems for voluntary source water
protection plans.
protection measures; to provide
(Section 207)
capacity development assistance; and
to establish and implement wellhead
protection programs.
SDWA §1452(f) prescribes types of
No additional provision.
No provision.
assistance that SRF may be used for,
e.g., making loans, providing loan
guarantees, buying or refinancing debt
obligations of municipalities.
SRF Grants Set-Aside Program
CWA — No existing provision. CWA
Adds a new §603(k) providing that in
No comparable provision.
Title II previously authorized a federal
years when SRF appropriations do not
construction grants program for
exceed $3 billion, states shall set aside
wastewater treatment works, with a
10% of a federal capitalization grant for
55% federal share. Authorizations
grants to eligible users for not more than
expired in FY1990, and the Title II
55% of the total cost of a project for
grants program was replaced by the
which a grant is made. State may waive
Title VI SRF program.
this requirement if the average time for
processing loan applications is less than
90 days. In years when SRF
appropriations exceed $3 billion, states
shall set aside not more than 10% nor
less than 5% of its SRF. (Section 107)
SDWA — No existing provision.
Adds new §1452(s) providing that in
§1452(d) authorizes states to use up to
years when SRF appropriations do not
305 of their capitalization grant to
exceed $2.5 billion, states shall set aside
subsidize loans (including forgiveness
10% of a capitalization grant for grants
of principal) for communities that are
to eligible projects for not more than
disadvantaged or may become
55% of the total cost of a project for
disadvantaged as a result of a proposed
which a grant is made. State may waive
project.
this requirement if the average time for
processing loan applications during the

CRS-8
Current Law
S. 2550
H.R. 1560
preceding 12 months is less than 90
days. If an annual appropriation exceeds
$2.5 billion, states shall set aside not
more than 5% nor less than 2.5% of its
SRF. (Section 206)
Fund Management
CWA §603(c) requires that CWA SRFs
No additional provisions.
Requires that CWA SRFs be maintained
be maintained and credited with loan
and credited with loan repayments and
repayments and be maintained in
be maintained in perpetuity. Fees shall
perpetuity.
be used solely for administering the
fund. (Section 302(b))
CWA §602(b)(9) requires that as part
Extends requirement for generally
of capitalization grant agreement, state
accepted government accounting
will use generally accepted government
standards to the reporting of
accounting standards.
infrastructure assets. (Section 302(a))
SDWA §1452(c) requires that SDWA
No additional provisions.
No provision.
SRFs be maintained and credited with
loan repayments and interest, and be
maintained in perpetuity. Amounts not
needed for current obligation or
expenditure must be invested in interest
bearing obligations.
Extension of Loans
CWA §603(d) provides that a water
Adds new §603(e) to permit state to
Modifies §603(d) to permit state to
pollution control revolving fund may
provide an extended term for a CWA
provide an extended term for a CWA
make loans at terms not to exceed 20
SRF loan to a disadvantaged community
SRF loan (up to 30 years, so long as that
years.
(up to 30 years, so long as that period
period does not exceed the project’s
does not exceed the project’s design
design life). (Section 303(b))
life). (Section 104)
SDWA §1452(f) provides that a
No additional provisions.
No provision.
SDWA SRF may make loans at terms
not to exceed 20 years. Exception: a

CRS-9
Current Law
S. 2550
H.R. 1560
state may extend the term of a loan to
as much as 30 years for disadvantaged
communities, provided the term does
not exceed the project’s design life.
Additional Subsidization
CWA §603(d) permits states to make
Adds new §603(e) authorizing states to
Adds new §603(i) authorizing states to
loans at or below market interest rates,
provide additional subsidization,
provide additional subsidization from a
including interest-free loans. CWA
including forgiveness of principal, for
CWA SRF, including forgiveness of
has no existing provisions for
projects in disadvantaged communities
principal and negative interest loans, to
additional subsidization or forgiveness
or communities expected to become
projects to benefit a municipality that
of loans.
disadvantaged.
meets the state’s affordability criteria.
Also may provide subsidization to
implement alternative processes or
techniques that may result in cost
savings or increased environmental
benefits.
Additional subsidization under this
Total amount of subsidization provided
provision may not exceed 30% of the
by a state may not exceed 30% of its
state’s capitalization grant in that year.
capitalization grant.
(Section 104(a))
State also may provide additional
subsidization to municipalities that do
not meet affordability criteria if the
municipality seeks to benefit individual
ratepayers in the residential user rate
class and ensures that this subsidization
will be directed through a user charge
rate system to such ratepayers.
New §603(e) defines “disadvantaged
Directs states to establish affordability
community” to mean the service area, or
criteria by Sept. 30, 2004. EPA may
portion of a service area, of a treatment
provide information to assist states in
works that meets affordability criteria
establishing criteria. (Section 303(f))
established by the state. (Section 104(a))

CRS-10
Current Law
S. 2550
H.R. 1560
No set-aside provision.
Set-aside: In any year when CWA SRF
appropriations exceed $1.4 billion, a
state shall set aside 25% of the
difference between its capitalization
grant and its proportionate share of $1.4
billion to provide additional
subsidization for projects that meet
affordability criteria. (Section 303(f))
SDWA §1452(d) authorizes states to
No additional provisions.
No provision.
provide additional loan subsidization,
including forgiveness of principal, for
projects in disadvantaged communities.
The total amount of loan subsidies may
not exceed 30% of the state’s
capitalization grant for that year.
§1452(d)(3) defines ‘disadvantaged
Amends definition of ‘disadvantaged
No provision.
community’ as the service area of a
community’ in §1452(d)(3) to include
system that meets affordability criteria
the service area, or portion of a service
set by the state. EPA may publish
area, of a water system that meets
information to assist states in
affordability criteria.
establishing these criteria.
(Section 204)
Financial Assistance to Small Systems from the SRF
CWA — No existing provision.
No provision.
Directs states, beginning in FY2005, to
use at least 15% of CWA capitalization
grants to assist municipalities with
population less than 20,000, if there are
sufficient applications for assistance.
(Section 122(c))
SDWA §1452(a)(2) requires that 15%
No additional provision. (For related
No provision.
of the amount credited to a state
provisions see SRF grants set-aside
SDWA SRF in any fiscal year must be
program and small public water system
available for providing loan assistance
grant program)
to systems serving fewer than 10,000

CRS-11
Current Law
S. 2550
H.R. 1560
persons, to the extent such funds can be
obligated for eligible projects.
Technical Assistance to Small Systems from the SRF
CWA — No existing provision.
No provision.
Authorizes states to provide CWA SRF
assistance to small treatment works for
technical and planning assistance and
assistance with financial management,
user fee analysis, capital improvement
planning, facility operation and
maintenance, repair schedules to
improve treatment plant management
and operations. Amounts shall not
exceed 2% of capitalization grant
awards to the fund. (Section 303(e))
SDWA §1452(g)(2) authorizes states to
No additional provision.
No provision.
use 2% of their SRF grant to provide
technical assistance to water systems
serving 10,000 or fewer persons.
SDWA §1452(q) authorizes EPA to
reserve up to 2% of the SRF
appropriation to provide technical
assistance to small systems (not to
exceed the amount authorized under
§1442(e) (regarding small systems
technical assistance).
Technical Assistance Grants for Rural and Small Treatment Works
CWA — No existing provision, but
Adds new Section 222 to authorize EPA
Similar provision. Modifies CWA
§104(b) generally authorizes EPA to
to make grants to qualified nonprofit
§104(b) to authorize EPA to make
support or conduct various types of
providers for technical assistance to
grants to nonprofit organizations
research, investigations, and training.
treatment works located in rural areas
concerning assistance to rural and small
and serving fewer than 10,000 users in
municipalities, publicly owned
planning, developing, and obtaining
treatment works and decentralized

CRS-12
Current Law
S. 2550
H.R. 1560
financing for eligible projects.
wastewater treatment systems
Authorizes grants to nonprofits to
concerning planning, design, financing,
capitalize revolving loan funds for
construction and operation of
predevelopment costs of wastewater
wastewater treatment works.
projects or certain equipment
Authorizes grants to nonprofits to
replacement costs. Loans to small
capitalize revolving loan funds for
systems may not exceed $100,000 and
predevelopment costs of wastewater
the loan term may not exceed 10 years.
projects or certain equipment
Defines “qualified nonprofit technical
replacement costs. Authorizes not to
assistance provider.” To the maximum
exceed $75 million per year for
extent possible, all states should get a
FY2004-2008. Grants to nonprofits
grant under this provision. Requires
shall be awarded competitively to the
grantees to consult with states, to submit
extent practicable. (Section 101)
annual reports. Authorizes $25 million
per year for FY2005-2009. (Section 101)
SDWA §1442(e) authorizes EPA to
Amends §1442(e) to authorize EPA to
No provision.
provide technical assistance to small
make grants to private, nonprofit entities
systems through circuit-rider and
to capitalize revolving funds to provide
regional technical assistance programs.
financing to systems serving 10,000 or
Assistance may go to nonprofit
fewer persons for predevelopment costs,
organizations. Authorizes $15 million
short-term costs incurred for
for each of FY1997-FY2003.
replacement equipment, and small
capital projects. Loans to small systems
may not exceed $100,000 and the loan
term may not exceed 10 years. Grant
recipients must submit annual activity
reports to EPA Authorizes $25 million
for each of FY2005-FY2009 for this
program. (Section 208)
State Administrative Costs Set-Aside
CWA §603(d) allows a state to reserve
Increases allowed CWA reservation for
Increases allowed reservation for
up to 4% of a federal capitalization
administrative costs to 6%. (Section 108)
administrative costs to $400,000, or 1/5
grant to cover the reasonable costs of
percent per year of the current valuation
administering the SRF.
of the state’s SRF, whichever is greater.
(Section 303(d))

CRS-13
Current Law
S. 2550
H.R. 1560
SDWA §1452(g)(2) allows a state to
Increases allowed SDWA reservation for
No provision.
use up to 4% of a federal capitalization
administrative costs to 6%. (Section
grant to cover the reasonable costs of
205(a))
administering programs under §1452
and to provide technical assistance to
public water systems.
§1452(g)(2) also authorizes states to
Repeals requirement that states match
use up to another 10% of a federal
funds reserved for these purposes.
capitalization grant to administer public
(Section 205(a))
water system supervision programs, to
administer or provide technical
assistance through source water
protection programs, to develop and
implement capacity development
strategies, and for operator certification
programs. For these purposes, states
must provide a dollar-for-dollar match
of funds.
Reservation of Funds for Planning
CWA §604(b) directs states to reserve
Increases reservation of funds for
Increases reservation of funds for
1% of sums allotted under Title VI, or
planning to 2% of allotted sums or
planning to 2% of allotted sums, or
$100,000, whichever is greater, to carry
$100,000. (Section 109(3))
$100,000, whichever is greater. (Section
out specified planning activities.
304(b))
SDWA — No provision.
No provision.
No provision.
Cross-Cutting Requirements; Labor Standards
CWA §602(b)(6) attaches 16 specific
Davis-Bacon prevailing wage
Treatment works constructed in whole
statutory requirements to projects
requirements (CWA §513) shall apply to
or in part with funds directly made
funded with a capitalization grant (but
projects that receive funding, in whole or
available by Title VI capitalization
not to SRF activity made from loan
in part, from a state water pollution
grants and CWA §205(m) shall comply
repayments or other state monies). All
control revolving fund. (Section 102)
with the following CWA provisions:
but two are CWA-specific carryover
implementing a user charge system and
(“equivalency”) requirements from the
having adequate legal and financial
previous CWA Title II construction
capability to construct, operate and

CRS-14
Current Law
S. 2550
H.R. 1560
grant program. Other cross-cutting
maintain the treatment works (CWA
federal requirements are: applicability
§204(b)(1)); restrictions on funding
of the National Environmental Policy
sewer collector systems (CWA §211);
Act and Davis-Bacon prevailing wage
cost-effectiveness and value
provisions for treatment works
engineering review (CWA §218); and
construction. The requirements applied
applicability of NEPA (CWA §511(c))
to funds provided through FY1994.
(Section 302(b)) (Does not extend
Davis-Bacon requirements.)
SDWA SRF provisions (§1452) do not
Revises SDWA §1450(e) to expressly
No provision.
specify federal cross-cutting
apply Davis-Bacon to all construction
requirements, but, as with CWA
projects financed in whole or in part, and
assistance, a number of federal laws,
by any form of assistance provided
executive orders, and government-wide
under SDWA (including assistance
policies apply by their own terms to
provided from state drinking water
projects and activities receiving federal
SRFs). (Section 202)
financial assistance, regardless of
whether a statute authorizing assistance
specifies that they apply. Several apply
only to the state as a grant recipient.
All projects for which the state
provides SDWA SRF assistance in
amounts up to the amount of the
capitalization grant must comply with
cross-cutting laws and requirements;
amounts greater than this are not
subject to cross-cutting requirements.
§1450(e) directs EPA to take such
action as may be needed to assure
compliance with the Davis-Bacon Act.
Requirements for Receipt of Funds
CWA §602(b) specifies a number of
No additional provision.
Amends §602(b) to add a requirement
conditions for receipt of SRF
that, beginning in FY2005, states shall
assistance. (See discussion above on
require as a condition of receiving
cross-cutting requirements.)
CWA SRF assistance that recipients
evaluate the cost and effectiveness of

CRS-15
Current Law
S. 2550
H.R. 1560
innovative and alternative processes and
techniques and select projects
accordingly; and consider the cost and
effectiveness of alternative management
and financing approaches (including
rate structures, consolidation, public-
private partnerships). Requires use of a
qualification-based selection method in
the awarding of contracts and
subcontracts for funds directly made
available from Title VI capitalization
grants. (Section 302(b))
Adds new §603(d)(1)(E) to require that
recipient of loan assistance develop and
implement a fiscal sustainability plan
that includes an inventory and
evaluation of critical assets of the
portion of the treatment works and plan
for maintenance and repair of the
portion of the facility funded by the
SRF. (Section 303(c))
SDWA §1452, like the CWA
No additional provision.
No provision.
provisions, imposes various
requirements on recipients of SRF
assistance. §1452(f) further requires
that a loan recipient establish a
dedicated source of revenue (or for
privately owned system, demonstrate
adequate security) to repay loan.
Priority System Requirement
CWA §216 authorizes states to
Adds new §603(h) to update the priority
Revises §603(g) to update the CWA
determine the priority of specific
list requirement. Requires each state to
priority list requirement. Requires
projects to be funded. Identifies
establish a system for providing
states to establish or update a list of
categories of eligible treatment works
financial assistance from the SRF. In it,
projects and activities for which SRF

CRS-16
Current Law
S. 2550
H.R. 1560
projects that states may include on
state shall give more weight to
assistance is sought, using a listing
priority list.
applications that include inventory of
methodology each state shall establish.
assets, financing plan, review of options
The list may include categories of
for restructuring the treatment works,
nonpoint source activities. States shall
review of options other than traditional
seek to achieve the greatest degree of
wastewater approach for the facility, and
water quality improvement and consider
other appropriate information. Defines
whether improvements would be
“restructuring” and “traditional
realized without SRF assistance.
approach.” State shall biennially publish
(Section 305(a))
a summary of projects eligible for
assistance (i.e., treatment works and
If the state does not fund projects and
other projects), including a project’s
activities in the order on the priority list,
priority and anticipated funding
it must provide an explanation of the
schedule. (Section 105)
change. (Section 305(b))
SDWA §1452(b)(3) requires states to
Expands §1452(b)(3) to direct states to
No provision.
develop Intended Use Plans for SRF
give more weight to applications by
funds, giving priority to using funds for
community water systems that include
projects that: address the most serious
an inventory of assets, a schedule for
risks; are needed to ensure compliance,
asset replacement, a financing plan, a
and assist systems most in need on a
review of options for restructuring the
per household basis. Requires states to
water system, a review of options other
publish periodically their list of
than traditional approach, and other
projects eligible for assistance.
information the state may require.
Defines “restructuring” and “traditional
approach.” Requires states to publish at
least biennially a list of projects eligible
for assistance. (Section 205(b))
Allotment
CWA §205(c)(3) provides a state-by-
Revises CWA allotment for SRF
Current CWA allotment formula shall
state formula for annual allotment of
capitalization grants for FY2005-2009
apply to SRF capitalization grant
available funds. This formula, in effect
Moves towards a target allotment based
distribution in FY2003 and FY2004.
since 1987, combines population and
on needs (meaning, allotment in
Beginning in FY2005, appropriated
need factors. No state currently
accordance with each state’s
amounts up to $1.35 billion shall be
receives less than 0.4971% of available
proportional share of total needs) and no
allotted under the current allotment
funds (except for territories, which
state receiving less than 1.0% of total
formula. Amounts that exceed $1.35

CRS-17
Current Law
S. 2550
H.R. 1560
generally receive smaller shares).
funds. Includes complex factors to
billion shall be allotted according to a
moderate potential for substantial loss or
needs-based formula to be developed by
gain of funds under the target, compared
EPA; no minimum state share specified.
with current allotment formula. The
(Section 304(a))
result, in general, is that small states
would receive somewhat larger
EPA is directed to publish an allotment
percentages under the revised formula
formula based on water quality needs by
than under the current formula, while, in
Sept. 30, 2004. (Section 304(c))
general, most (but not all) of the states
with large needs would have the same
percentage allotment under the revised
formula as under current law. Also
includes language that would adjust the
states’ percentage allotments if the
appropriated amounts were to increase
above current $1.35 billion annual
appropriations. At higher appropriated
levels (above $3.15 billion), adjustments
would enable the small states to reach
the 1% target minimum, while dollar
amounts received by the larger states
would still be larger than amounts that
they receive today under the current
allotment.
Allocates a total of 0.25% of available
funds among Guam, Virgin Islands,
American Samoa, Commonwealth of
Northern Mariana Islands, Micronesia,
Marshall Islands, Palau to be allotted by
EPA. (Section 109)
SDWA §1452(a)(D) requires that funds
No additional provisions.
No provision.
are allotted to the states based on a
formula that reflects the proportional
share of each state’s needs identified in
the most recent needs survey

CRS-18
Current Law
S. 2550
H.R. 1560
(conducted every four years). The
minimum share for each state and
District of Columbia is 1% of available
funds; territories receive up to 0.33%.
SRF Authorization
CWA §607 authorizes $8.4 billion in
Authorizes CWA SRF capitalization
Authorizes CWA SRF capitalization
capitalization grants for state revolving
grants as follows: $3.2 billion in each of
grants as follows: $2 billion in FY2004,
funds for FY1989-94. (Congress has
FY2005 and FY2006, $3.6 billion in
$3 billion in FY2005, $4 billion in
continued to appropriate SRF
FY2007, $4 billion in FY2008; and $6
FY2006, $5 billion in FY2007, and $6
capitalization grants since FY1994.
billion in FY2009, totaling $20 billion.
billion in FY2008, totaling $20 billion.
Appropriations for the last five years
Reserves $1 million per year for EPA to
(Section 308)
have been $1.35 billion per year.)
pay the costs of conducting needs
surveys. (Section 110)
SDWA §1452(m) authorizes SRF
Authorizes SDWA SRF capitalization
No provision.
capitalization grants: $599 million for
grants as follows: $1.5 billion in
FY1994, and $1 billion for each of
FY2005; $2 billion in each of FY2006
FY1995-FY2003, totaling $9.59
and FY2007; $3.5 billion in FY2008;
billion.
and $6 billion in FY2009, totaling $15
billion. Reserves $1 million per year to
pay the costs of conducting needs
surveys. (Section 209)
Cross-Collateralization between CWA and SDWA SRFs
CWA — No existing provision, but
Adds new §603(j) to permit a state to
No comparable provision.
FY1998 and FY1999 EPA
transfer up to 33% of a CWA
appropriation laws allow states to
capitalization grant to its SDWA SRF
combine assets of CWA and SDWA
and vice versa. (Section 106)
SRFs as security for bond issues to
enhance the lending capacity of one or
both SRFs.
§302 of the SDWA Amendments of
Incorporates this authority into SDWA
No provision.
1996 (P.L. 104-182) authorized a state,
under new §1452(g)(5).
prior to FY2002, to transfer as much as
(Section 205(a))
33% of the SDWA SRF capitalization

CRS-19
Current Law
S. 2550
H.R. 1560
grant to the CWA SRF or an equivalent
amount from the CWA SRF to the
SDWA SRF.
SRF Set-Aside for Indian Programs
CWA §518 authorizes the EPA
Increases CWA funds reserved for
Increases CWA funds reserved for
Administrator to reserve 0.5% of funds
Indian Tribes to 1.5% of funds available
Indian Tribes to not less than 0.5% or
appropriated under §207 for developing
under Title VI. (Section 108)
more than 1.5% of funds available
waste treatment management plans and
under §207. Funds are to be used for
construction of sewage treatment works
projects to assist Indian tribes, former
to serve Indian tribes. Appropriations
Indian reservations in Oklahoma, and
laws since FY2001 have reserved 1.5%
Alaska Native villages. (Section 402)
of CWA SRF appropriated funds for
Indian tribes.
SDWA §1452(i) authorizes EPA to
No additional provisions.
No provision.
reserve 1.5% of the SRF appropriation
for grants to Indian Tribes and Alaska
Native villages.
SRF Review Process — Assistance for Accessing the SRF
CWA — No existing provision.
Directs the EPA Administrator to
Adds new §607 that directs EPA to
SDWA — No existing provision.
identify ways to streamline and improve
assist states in establishing simplified
the application and review process for
procedures for treatment works to
CWA SRF and SDWA SRF assistance
obtain CWA SRF assistance and shall
and to submit a report to Congress.
publish a manual to assist systems in
(Section 304)
obtaining assistance. (Section 307)
Reports: Needs Surveys
CWA §516(b)(1) directs EPA to
Modifies needs survey to every four
No comparable provision.
conduct a survey of needed publicly
years. (Section 111)
owned treatment works every two
years.
SDWA §1452(h) directs EPA to
No additional provisions.
No provision.
conduct a survey of water system

CRS-20
Current Law
S. 2550
H.R. 1560
capital improvement needs survey and
report to Congress every four years. On
the same schedule, §1452(i) directs
EPA to conduct needs surveys of
drinking water facilities to serve Indian
Tribes.
Removal of Lead from Drinking Water in Schools
SDWA §1464(d) directs states to
Inserts new §1464(d) requiring the
No comparable provision, but see H.R.
establish programs to assist local
Administrator to establish a program to
4268.
educational agencies to test for and
provide grants to states to assist in
remedy lead contamination in drinking
paying, or to provide reimbursement for,
water at schools, and requires schools
the costs incurred by local educational
to make test results available and to
agencies in testing for, remediating , and
notify parents, teachers and others of
informing students, parents, teachers,
the availability of test results.
and employees about lead contamination
in drinking water at schools within their
(In 1996, the U.S. Court of Appeals for
jurisdiction.
the Fifth Circuit ruled that the
requirements in §1464(d) that states
establish programs violate the 10th
Amendment and are unconstitutional.
ACORN v. Edwards, 81 F .3d 1387 (5th
Cir. 1996).)
§1465(a) directs EPA to make grants to
states to carry out §1464 and §1465(b)
requires states to use grants to test for,
and remediate, lead contamination in
school drinking water.
§1465(a) authorizes EPA to use up to
New §1464(d) authorizes EPA to use up
5% to pay administrative expenses.
to 5% to pay administrative expenses.
§1465(c) authorized $30 million for
New §1464(d) authorizes $40 million for
each of FY1989-FY1991 for grants to
each of FY2005-FY2008;
states.
(Section 210(a))

CRS-21
Current Law
S. 2550
H.R. 1560
Lead Contamination in Drinking Water in the District of Columbia
SDWA — §1465(a) directs the
New §1465(a) authorizes the
No comparable provision.
Administrator to make grants to states
Administrator to provide a $20 million
to carry out §1464 (see above).
grant to the District of Columbia to
address lead contamination in the local
water supply. Funds may be used to
assess infrastructure, test water supplies
distribute filters, evaluate chemical
additive, replace pipes, and evaluate and
improve public communication.
Authorizes to be appropriated to carry
out this section $20 million.
§1465(b) requires that grants be used
New §1465(b) directs the Administrator
by states to test for, and remediate, lead
to contract with the National Academy
contamination in school drinking water.
of Sciences (NAS) to conduct a study
Authorized EPA to use up to 5% to pay
that (1) evaluates compliance by the
administrative expenses.
District of Columbia Water and Sewer
Authority with lead in drinking waster
regulations, and the potential causes of
lead in the local water supply; and (2)
assess, from a cross-section of cities
with lead service lines, the extent to
which those cities exceeded the lead
action level, and the potential causes of
the exceedences. Not later than one year
after enactment, the NAS must submit a
report to the House Energy and
Commerce Committee and the Senate
Environment and Public Works
Committee. Authorizes $2 million for
the study. (Section 210(b))

CRS-22
Current Law
S. 2550
H.R. 1560
Small Public Water System Grant Program
1. Establishment of Small System Grant
(Sections 211 and 212 of S. 2550 each
No comparable provision.
Program
add new SDWA Part G and contain
nearly identical provisions)
CWA — Not applicable.
Amends SDWA to establish within EPA
SDWA — No provision.
a small public water system assistance
program for eligible entities within states
and areas governed by Indian Tribes.
(Section 211 and Section 212)
2. Definitions
New SDWA §1471 defines for Part G:
No comparable provision.
“eligible activity” to mean an activity
needed to ensure compliance with
drinking water regulations, including
source water protection and excluding
any activity to increase the population
served by a system (unless needed for
compliance or to serve a population not
served by a safe public water system);
“eligible entity” means a small public
water system that, based on affordability
criteria, serves a disadvantaged
community or a community that would
otherwise become disadvantaged as a
result of carrying out an eligible activity,
and a system that would incur more than
$3 million in costs in complying with
regulations and is, or would become, a
disadvantaged community; “small public
water system” includes community and
non-community water systems that serve
populations of 15,000 or fewer persons.
(Section 211 and Section 212)
3. Program establishment
§1472(a) directs EPA to establish a
No comparable provision.
small system grant program by July 1,
2006. (Section 211 and Section 212)

CRS-23
Current Law
S. 2550
H.R. 1560
4. Program priorities
§1472(b) directs EPA to provide grants
No comparable provision.
to eligible systems for activities that:
address the most serious health risk from
lack of compliance; are needed to ensure
compliance; and assist communities
most in need, based on median
household income, under affordability
criteria established by the state (or EPA
for entities in Tribal areas). EPA must
also consider giving priority to activities
carried out by communities that form
management cooperatives.
For entities in Tribal areas, §1472(e)(2)
requires EPA and the Indian Health
Service to develop an annual list of
eligible activities based on the above
priorities. (Section 211 and Section 212)
5. Technical assistance
§1472(d) requires EPA to use at least
No comparable provision.
1.5% of the available funds to provide
grants to nonprofit technical assistance
organizations to be used to assist eligible
entities in: assessing needs; identifying
additional funding sources to meet cost-
sharing requirements; and planning,
implementing and maintaining activities
that receive funding. Entities may use no
more than 5% of their grant for such
technical assistance; §1472(e)(4)
imposes a similar 5% limit for entities
governed by Indian Tribes.
(Section 211 and Section 212)
6. Grants for Indian Tribes
§1472(e) Requires EPA to use at least
No comparable provision.
3% of funds available each year to
provide grants to eligible entities located
in areas governed by Indian Tribes.
(Section 211 and Section 212)

CRS-24
Current Law
S. 2550
H.R. 1560
7. Limitations on receipt of funds
(Sections 211 and 212 of S. 2550
No comparable provision.
contain different provisions.)
As provided in Section 211:
§1472(f) provides that eligible entities
may receive grants only: 1) if EPA
determines that the grant will aid
compliance; 2) to restructure or
consolidate to achieve compliance; or if
restructuring is not feasible, EPA
determines that the entity has made a
good faith effort to comply and is
adhering to an enforceable compliance
schedule; and 3) if EPA determines that
an entity lacks the technical, managerial,
operations, maintenance, or financial
capacity to ensure compliance, and the
entity agrees to make changes in
operations, and EPA determines that the
measures are needed to ensure
compliance capacity over the long term.
As provided in Section 212:
§1472(f) generally provides that grant
may not be provided to entities that lack
the technical, managerial, operations,
maintenance, or financial capacity to
ensure compliance, or are in significant
noncompliance with a drinking water
regulation. The exception to this
prohibition allows such entities to
receive a grant if the conditions above
are met. Before providing assistance to
an entity that is in significant
noncompliance, EPA must assess
whether the entity has the capacity to
comply with SDWA regulations.

CRS-25
Current Law
S. 2550
H.R. 1560
8. Cost share
§1472(g) provides that the share of the
No comparable provision.
total cost of an activity funded by a grant
generally may not exceed 80%; EPA
may waive this requirement, partially or
completely, as needed.
(Section 211 and Section 212)
9. Reports
§1473 requires EPA to report annually,
No comparable provision.
for FY2006-2010, to the Senate
Committee on Environment and Public
Works and the House Committee on
Energy and Commerce. The reports must
list the activities receiving funds,
identify the number and amounts of
grants awarded and the grant recipients.
(Section 211 and Section 212)
10. Authorization of Appropriations
(Sections 211 and 212 of S. 2550
No comparable provision.
contain different provisions.)
§1474 authorizes for this program $200
million for each of FY2005-FY2009.
(Section 211)
§1474 authorizes for this program $1
billion for each of FY2008-2011.
(Section 212)
Pilot Program for Alternative Water Source Projects
CWA §220 authorizes EPA to establish
Extends authorization at $25 million per
Extends authorization without other
a pilot program of grants for alternative
year for FY2005-2007. (Section 112)
modification through FY2008. (Section
water source projects to meet critical
204)
water supply needs. Authorizes
appropriations of $75 million annually
for FY2002-2004.

CRS-26
Current Law
S. 2550
H.R. 1560
Sewer Overflow Grants
CWA §221 authorizes $750 million
Revises §221, adding stormwater runoff
Authorizes $250 million per year for
annually in FY2002-2003 for grants for
projects. Authorizes to be appropriated
sewer overflow grants for FY2005-2008
municipal combined sewer overflow
$250 million per year for FY2005-2009.
and such sums as necessary for FY2004.
and sanitary sewer overflow projects.
(Section 113)
Specifies allocation criteria for FY2004
Financially distressed communities are
(same as for FY2002 in current
to have priority. Grants are only
provision) and FY2005 and beyond
available in years in which Title VI
(based on each state’s proportional need
(SRF) funds are at least $1.35 billion.
for overflow control projects). Funded
projects shall generally conform to
requirements applicable to SRF-funded
projects. (Section 205) (Also see H.R.
784, similar legislation approved by
House Transportation and Infrastructure
Committee July 21, 2004.)
Watershed Pilot Projects
CWA §121, Wet Weather Watershed
Makes a technical correction to
Reauthorizes existing grants program at
Pilot Projects, authorized $45 million
redesignate this provision as CWA §122.
$20 million per year for FY2004-2008.
for FY2002-2004 for technical
(Section 114)
Grants may be used for watershed
assistance and grants to municipalities
partnerships to address nonpoint sources
for pilot projects to manage wet
of pollution to reduce adverse impacts
weather discharges and to demonstrate
on water quality. Changes reporting
stormwater management technologies.
requirement from five years after
(When enacted in P.L. 106-554, this
enactment to seven years. Makes a
provision was one of two that were
technical correction to redesignate this
designated as §121.)
provision as CWA §122. (Section 103)
National Estuary Program
CWA §320 authorizes the National
Reauthorizes grants at $35 million per
No comparable provision, but see H.R.
Estuary Program. Governors may
year (no change) for FY2006-FY2010.
4731, similar legislation approved by
nominate estuaries and request a
(Section 307)
House Transportation and Infrastructure
management conference to develop a
Committee July 21, 2004.
comprehensive conservation and
management plan (CCMP) for the

CRS-27
Current Law
S. 2550
H.R. 1560
estuary. Authorizes grants for
development and implementation of
CCMPs.
Sewage Control Technology Grant Program
CWA — No existing provision.
Adds new §701 to the CWA. Directs
No comparable provision.
EPA to establish a competitive program
of grants to states and municipalities to
upgrade nutrient removal technologies of
wastewater treatment works with
permitted design capacity to treat
500,000 gallons or more of wastewater
per day and are located in the
Chesapeake Bay watershed. Federal
share of project costs shall not exceed
55%. Authorizes $100 million annually
for FY2005-2009. (Section 308) (Also
see S. 827/H.R. 568, similar legislation.)
Demonstration Program for Water Quality Enhancement and Management
CWA — No existing provision.
Directs EPA to establish a nationwide
No comparable provision.
SDWA — No existing provision.
demonstration program of 10 projects
per year to promote innovations in
technology and alternative approaches to
water quality management or water
supply and reduce municipalities’ costs
to comply with the CWA and SDWA.
Specifies criteria for selection of
municipalities to carry out projects and
types of projects relating to excessive
nutrient growth, lack of alternative water
supply, nonpoint source pollution, sewer
overflows, problems with naturally
occurring constituents, or new
approaches to water treatment,
distribution and collection systems, and

CRS-28
Current Law
S. 2550
H.R. 1560
others. Municipalities applying for
grants shall submit a plan that meet
specified criteria. Non-federal share of
project costs shall be at least 20%.
Authorizes $20 million per year for
FY2005-2009.
Also directs EPA to carry out a grant
program for research and development
on innovative and alternative
technologies for water quality or
drinking water supply; authorizes $20
million per year for FY2005-2009.
(Section 302)
Southeast Colorado Safe Drinking Water Supply
SDWA — No existing provision.
Directs the EPA Administrator to make a
No provision.
grant to the Southeast Colorado Water
Activity Enterprise to construct a water
transmission line from the Pueblo
Reservoir to the city of Lamar, CO.
Authorizes for this purpose $85 million
for the period of FY2005-FY2010.
(Section 305)
Environmental Finance Centers
CWA — No existing provision.
No provision.
No provision.
SDWA §1420(g) requires EPA to
Authorizes $2 million for each of
No provision.
provide initial funding for university-
FY2005-FY2009 to implement this
based environmental finance centers to
program.
provide technical assistance to state
(Section 201)
and local officials in developing the
financial and managerial capacity of
public water systems. Directs EPA to
establish a national public water system

CRS-29
Current Law
S. 2550
H.R. 1560
capacity development clearinghouse.
Authorizes $1.5 million for each of
FY1997-FY2003 for this program.
Miscellaneous
1. State management assistance
No additional provision.
Authorizes $250 million per year for
FY2003-2008 for CWA §106. (Section
CWA §106 authorizes grants to states
102)
to assist management of state water
pollution control programs.
SDWA §1443 authorizes $100 million
No additional provision.
No provision.
for each of FY1997-FY2003 for grants
to states to administer public water
system supervision programs.
2. Annual report and federal oversight
No additional provision.
Requires that the annual report include
identification of the eligible purpose for
CWA §606(d) requires states to
which SRF assistance was provided.
provide an annual report on achieving
(Section 306(a))
the goals and objectives of its Intended
Use Plan.
CWA §606(e) requires EPA to conduct
Authorizes EPA to allow a state to
annual oversight review of a state’s
certify its compliance with CWA Title
Intended Use Plan.
VI for purposes of this review. (Section
306(b))
SDWA §1452(g) requires states to
No additional provision.
No provision.
submit a report every two years to EPA
on its SRF activities and related audits;
requires EPA to periodically audit all
state loan funds.
SDWA §1452(r) directs EPA to assess
the effectiveness of SRFs through
FY2001 and report to Congress.

CRS-30
Current Law
S. 2550
H.R. 1560
3. Sewage collection systems
No additional provision.
Amends §211. Updates limits on sewer
collector systems to those in systems or
CWA §211 limits Title II assistance for
communities in existence as of Jan. 1,
replacement or major rehabilitation of
2003. Projects are to address adverse
existing sewage collection systems or
environmental conditions existing on
for new collector systems in an existing
the date of enactment of this provision.
community.
(Section 201)
4. Cost-effectiveness
No provision.
Modifies §218 to delete specification of
devices and systems selected for an
CWA §218 expresses the policy of
overall treatment system. (Section 203)
Congress regarding financial assistance
for waste treatment and management
systems that are the most economical
and cost-effective combination of
treatment works to meet requirements
of the act, including water conservation
measures.
5. Regulatory authority not provided
No provision.
Nothing in this act may be construed as
providing EPA with authority to issue
CWA — No existing provision.
regulations. (Section 403)
SDWA — No existing provision.
Cost of Service Study
CWA — No existing provision.
Directs the National Academy of
No comparable provision.
SDWA — No existing provision.
Sciences to prepare a study of the means
by which public water systems and
treatment works meet costs associated
with operation, maintenance, capital
replacement, and regulatory
requirements. The study shall address
issues including affordability and
identification and characterization of
disadvantaged communities. The study
shall be completed within two years.
(Section 303)

CRS-31
Current Law
S. 2550
H.R. 1560
Assessment of Perchlorate Contamination
CWA — No existing provision.
Requires the U.S. Geological Survey, no
No comparable provision.
SDWA — No existing provision.
later than one year after enactment, to
conduct a nationwide assessment of sites
contaminated with perchlorate and the
geological conditions at those sites, and
to report the results to Congress.
(Section 306)
Special Water Resources Study
Water Resources Planning Act of 1965
Amends §101 of the Water Resources
No comparable provision.
established a Cabinet-level Water
Planning Act to add the Secretary of
Resources Council and also established
Homeland Security to the Water
River Basin Commissions. The
Resources Council. Directs the Council
Council was empowered to maintain a
to carry out a Special Water Resources
continuing assessment of the adequacy
Study to project future water supply and
of water supplies in each region of the
demand, to develop recommendations
U.S. In addition, the Council was
for a comprehensive water strategy, to
mandated to establish principles and
evaluate federal water programs and
standards for federal participants in the
submit recommendations to eliminate
preparation of river basin plans and in
discrepancies and duplication among
evaluating federal water projects.
programs, and develop and make
Authorization for the Council still
available water planning models to
exists (42 U.S.C. §1962a), but
reduce water resource conflicts. Calls
President Reagan disbanded the
for interim reports and a final report not
Council in 1983, and there have been
later than three years after the first
no appropriations since then.
meeting of the Council following
enactment. Authorizes $9 million for
CWA — No existing provision.
FY2005 to carry out this study. (Section
SDWA — No existing provision.
309)

EveryCRSReport.com
The Congressional Research Service (CRS) is a federal legislative branch agency, housed inside the
Library of Congress, charged with providing the United States Congress non-partisan advice on
issues that may come before Congress.
EveryCRSReport.com republishes CRS reports that are available to al Congressional staff. The
reports are not classified, and Members of Congress routinely make individual reports available to
the public.
Prior to our republication, we redacted names, phone numbers and email addresses of analysts
who produced the reports. We also added this page to the report. We have not intentional y made
any other changes to any report published on EveryCRSReport.com.
CRS reports, as a work of the United States government, are not subject to copyright protection in
the United States. Any CRS report may be reproduced and distributed in its entirety without
permission from CRS. However, as a CRS report may include copyrighted images or material from a
third party, you may need to obtain permission of the copyright holder if you wish to copy or
otherwise use copyrighted material.
Information in a CRS report should not be relied upon for purposes other than public
understanding of information that has been provided by CRS to members of Congress in
connection with CRS' institutional role.
EveryCRSReport.com is not a government website and is not affiliated with CRS. We do not claim
copyright on any CRS report we have republished.