SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Drinking Water and Public Health 
Enhancement Amendments of 1993''.

SEC. 2. STATE REVOLVING FUNDS FOR SAFE DRINKING WATER

    Section 1443 of title XIV of the Public Health Service Act (the 
Safe Drinking Water Act) is amended by redesignating subsection (c) as 
(d) and by adding the following new subsection after subsection (b):
    ``(c) State Revolving Funds.--
            ``(1) General authority.--
                    ``(A) Grants to states to establish revolving 
                funds.--The Administrator shall enter into agreements 
                with States having primary enforcement responsibility 
                for public water systems to make capitalization grants, 
                including letters of credit, to the States under this 
                subsection to further the health protection objectives 
                of this Act. The grants shall be allotted to the States 
                in accordance with this section and deposited in 
                drinking water treatment revolving funds established by 
                the State.
                    ``(B) Use of funds.--Amounts deposited in such 
                revolving funds, including loan repayments and interest 
                earned on such amounts, shall be used only for 
                providing loans or other financial assistance of any 
                kind or nature that the State deems appropriate to 
                public water systems. Such financial assistance may be 
                used by a public water system only for expenditures 
                (not including monitoring, operation, and maintenance 
                expenditures) of a type or category which the 
                Administrator has determined, through guidance, will 
                facilitate compliance with national primary drinking 
                water regulations applicable to such system under 
                section 1411 or otherwise significantly further the 
                health protection objectives of this title. 15 percent 
                of the amount credited to any revolving fund 
                established under this section in any fiscal year shall 
                be available solely for providing loan assistance to 
                public water systems which regularly serve less than 
                10,000 individuals.
                    ``(C) Fund management.--Each State revolving fund 
                under this subsection shall be established, maintained, 
                and credited with repayments and interest. The fund 
                corpus shall be available in perpetuity for providing 
                financial assistance under this section. To the extent 
                amounts in each such fund are not required for current 
                obligation or expenditure such amounts shall be 
                invested in interest bearing obligations of the State 
                or of the United States. The Administrator and the 
                States shall take such steps as may be necessary to 
                insure that amounts made available under this 
                subsection are deposited in State revolving funds and 
                earning interest as promptly as practicable after the 
                commencement of the fiscal year in which such funds are 
                made available.
                    ``(D) Grants from revolving funds.--A State may not 
                provide assistance in the form of grants from a State 
                revolving fund established under this subsection in an 
                aggregate amount which exceeds the sum of the interest 
                collected on deposits in such State revolving fund plus 
                amounts deposited in such fund by the State pursuant to 
                paragraph (3). Such grants may only be made to public 
                water systems owned by a governmental or inter-
                governmental agency, a non-profit organization, an 
                Indian tribe, or any combination thereof which the 
                State finds to be experiencing financial hardship.
                    ``(E) Investor-owned public water systems.--In the 
                case of any public water system not owned by a 
                governmental or inter-governmental agency, a non-profit 
                organization, an Indian tribe, or any combination 
                thereof, the State may provide assistance from a State 
                revolving fund under this subsection only to those 
                systems having the greatest public health needs and 
                financial need. The State may provide loan assistance 
                to any such system from such a State revolving fund 
                only after making a determination that the system has 
                the ability to repay the loan according to its terms 
                and conditions. States are authorized to require such 
                systems to identify a dedicated source for repayment of 
                the loans and to impose such other requirements as may 
                be necessary to assure loan repayment.
            ``(2) Specific requirements.--The Administrator shall enter 
        into an agreement with a State under this subsection only after 
        the State has established to the satisfaction of the 
        Administrator that--
                    ``(A) the State will deposit all grants received 
                from the Administrator under this subsection, together 
                with all repayments and interest on such grants, in a 
                drinking water treatment revolving fund established by 
                the State in accordance with this subsection; and
                    ``(B) no loan or other financial assistance will be 
                provided to a public water system from such revolving 
                fund to be used for any expenditure that could be 
                avoided or significantly reduced by appropriate 
                consolidation of that public water system with any 
                other public water system, except that in such cases 
                such assistance may be provided from the revolving fund 
                for such consolidation.
        The Administrator, in consultation with the States and public 
        water systems, shall establish criteria to be applied in 
        determining when the consolidation of public water systems is 
        appropriate.
            ``(3) State contribution.--In the case of grants made after 
        fiscal year 1994, each agreement under this subsection shall 
        require that the State deposit in the fund from State moneys an 
        amount equal to at least 20 percent of the total amount of the 
        grant to be made to the State on or before the date on which 
        the grant payment is made to the State.
            ``(4) Combined financial administration.--Notwithstanding 
        subparagraph (A) of paragraph (2), a State may combine the 
        financial administration of a revolving fund established under 
        this subsection with the financial administration of any other 
        revolving fund established by the State if the Administrator 
        determines that--
                    ``(A) the grants under this subsection, together 
                with loan repayments and interest, will be separately 
                accounted for and used solely for the purposes 
                specified in paragraph (1); and
                    ``(B) the authority to establish assistance 
                priorities and carry out oversight and related 
                activities (other than financial administration) with 
                respect to such assistance remains with the State 
                agency having primary responsibility for administration 
                of the State program under this part.
            ``(5)  Fund administration.--(A) Each State may use up to 4 
        percent of the grants in a revolving fund established under 
        this subsection to cover the reasonable costs of administration 
        of the assistance program under this subsection and of 
        providing technical assistance to public water systems within 
        the State. For fiscal year 1994, each State may use up to 2 
        percent of the grants in any such revolving fund for public 
        water system supervision if the State matches such expenditures 
        with at least an equal amount of non-Federal funds (additional 
        to the amount expended by the State for public water 
        supervision in fiscal year 1993). An additional 1 percent of 
        the grants in such fund shall be used by each State to provide 
        technical assistance to public water systems in such State.
            ``(B) The Administrator shall publish such guidance and 
        promulgate such regulations as may be necessary to carry out 
        the provisions of this section, including--
                    ``(i) provisions to ensure that each State commits 
                and expends funds from revolving funds established 
                under this subsection in accordance with this Act and 
                applicable Federal and State laws,
                    ``(ii) guidance to prevent waste, fraud, and abuse, 
                and
                    ``(iii) guidance to avoid the use of funds made 
                available under this subsection to finance the 
                expansion of any public water system in anticipation of 
                future population growth.
        Such guidance and regulations shall also insure that the 
        States, and public water systems receiving assistance under 
        this subsection, use accounting, audit, and fiscal procedures 
        that conform to generally accepted accounting standards.
            ``(C) Each State administering a revolving fund and 
        assistance program under this subsection shall publish and 
        submit to the Administrator a report every 2 years on its 
        activities under this subsection, including the findings of the 
        most recent audit of the fund. The Administrator shall 
        periodically audit all revolving funds established under this 
        subsection in accordance with procedures established by the 
        Comptroller General.
            ``(6) Needs survey.--The Administrator shall conduct an 
        assessment of financial needs of all public water systems in 
        the United States and submit a report to the Congress 
        containing the results of such assessment within 2 years after 
        the date of the enactment of this subsection.
            ``(7) Indian tribes.--One and \1/2\ percent of the amounts 
        appropriated to carry out this subsection may be used by the 
        Administrator to make grants to Indian Tribes and Alaskan 
        Native Villages which are not eligible to receive either 
        capitalization grants from the Administrator under this 
        subsection or assistance from State revolving funds established 
        under this subsection. Such grants shall be used for 
        expenditures by such tribes and villages for public water 
        system expenditures referred to in paragraph (1)(B).
            ``(8) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out the purposes of this subsection 
        $599,000,000 for the fiscal year 1994 and $1,000,000,000 for 
        each of the fiscal years 1995, 1996, and 1997, and such sums as 
        may be necessary thereafter.''.
Drinking Water and Public Health Enhancement Amendments of 1993 - Amends the Safe Drinking Water Act to direct the Administrator of the Environmental Protection Agency to enter into agreements with States having primary enforcement responsibility for public water systems to make capitalization grants to be deposited in drinking water treatment revolving funds. 
Permits such funds to be used only for providing financial assistance to public water systems for expenditures that will facilitate compliance with national primary drinking water regulations. Allocates 15 percent of amounts in such funds solely for assistance to systems which regularly serve fewer than 10,000 individuals. 
Permits assistance to systems not owned by governmental agencies, nonprofit organizations, or Indian tribes based on public health and financial needs and repayment ability. 
Sets forth requirements for agreements, including that no financial assistance will be provided to a public water system if expenses could be avoided or significantly reduced by consolidation of such system with another system. 
Sets forth provisions concerning State contributions to grants and fund administration. 
Directs the Administrator to conduct and report to the Congress on a financial needs assessment of all public water systems. 
Authorizes the Administrator to make grants to Indian tribes and Alaskan Native villages which are ineligible for funding under this Act for public water system expenditures. 
Authorizes appropriations.
Drinking Water and Public Health Enhancement Amendments of 1993