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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1560 Introduced in House (IH)]

108th CONGRESS
  1st Session
                                H. R. 1560

     To amend the Federal Water Pollution Control Act to authorize 
 appropriations for State water pollution control revolving funds, and 
                          for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             April 2, 2003

    Mr. Duncan (for himself and Mr. Young of Alaska) introduced the 
 following bill; which was referred to the Committee on Transportation 
                           and Infrastructure

_______________________________________________________________________

                                 A BILL

 
     To amend the Federal Water Pollution Control Act to authorize 
 appropriations for State water pollution control revolving funds, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) In General.--This Act may be cited as the ``Water Quality 
Financing Act of 2003''.
    (b) Table of Contents.--

Sec. 1. Short title; table of contents.
Sec. 2. Amendment of Federal Water Pollution Control Act.
              TITLE I--TECHNICAL AND MANAGEMENT ASSISTANCE

Sec. 101. Technical assistance.
Sec. 102. State management assistance.
Sec. 103. Watershed pilot projects.
               TITLE II--CONSTRUCTION OF TREATMENT WORKS

Sec. 201. Sewage collection systems.
Sec. 202. Treatment works defined.
Sec. 203. Policy on cost effectiveness.
Sec. 204. Pilot program for alternative water source projects.
Sec. 205. Sewer overflow control grants.
        TITLE III--STATE WATER POLLUTION CONTROL REVOLVING FUNDS

Sec. 301. General authority for capitalization grants.
Sec. 302. Capitalization grant agreements.
Sec. 303. Water pollution control revolving loan funds.
Sec. 304. Allotment of funds.
Sec. 305. Intended use plan.
Sec. 306. Federal oversight.
Sec. 307. Technical assistance.
Sec. 308. Authorization of appropriations.
                      TITLE IV--GENERAL PROVISIONS

Sec. 401. Definition of treatment works.
Sec. 402. Funding for Indian programs.

SEC. 2. AMENDMENT OF FEDERAL WATER POLLUTION CONTROL ACT.

    Except as otherwise expressly provided, whenever in this Act an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be considered to 
be made to a section or other provision of the Federal Water Pollution 
Control Act (33 U.S.C. 1251 et seq.).

              TITLE I--TECHNICAL AND MANAGEMENT ASSISTANCE

SEC. 101. TECHNICAL ASSISTANCE.

    (a) Technical Assistance for Rural and Small Treatment Works.--
Section 104(b) (33 U.S.C. 1254(b)) is amended--
            (1) by striking ``and'' at the end of paragraph (6);
            (2) by striking the period at the end of paragraph (7) and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(8) make grants to nonprofit organizations--
                    ``(A) to provide technical assistance to rural and 
                small municipalities for the purpose of assisting, in 
                consultation with the State in which the assistance is 
                provided, such municipalities in the planning, 
                developing, and acquisition of financing for wastewater 
                infrastructure assistance;
                    ``(B) to capitalize revolving loan funds for the 
                purpose of providing loans, in consultation with the 
                State in which the assistance is provided, to rural and 
                small municipalities for predevelopment costs 
                associated with wastewater infrastructure projects or 
                short-term costs incurred for equipment replacement 
                that is not part of regular operation and maintenance 
                activities for existing wastewater systems, subject to 
                the conditions that any loan from the fund will be made 
                at a below market interest rate, for a term not to 
                exceed 10 years, and in an amount not to exceed 
                $100,000 and that all loan repayments will be credited 
                to the fund;
                    ``(C) to provide technical assistance and training 
                for rural and small publicly owned treatment works and 
                decentralized wastewater treatment systems to enable 
                such treatment works and systems to protect water 
                quality and achieve and maintain compliance with the 
                requirements of this Act; and
                    ``(D) to disseminate information to rural and small 
                municipalities and municipalities that meet the 
                affordability criteria established under section 
                603(i)(2) by the State in which the municipality is 
                located with respect to planning, design, construction, 
                and operation of publicly owned treatment works and 
                decentralized wastewater treatment systems.''.
    (b) Authorization of Appropriations.--Section 104(u) (33 U.S.C. 
1254(u)) is amended--
            (1) by striking ``and (6)'' and inserting ``(6)''; and
            (2) by inserting before the period at the end the 
        following: ``; and (7) not to exceed $75,000,000 for each of 
        fiscal years 2004 through 2008 for carrying out subsections 
        (b)(3) and (b)(8), except that not less than 20 percent of the 
        amounts appropriated pursuant to this paragraph in a fiscal 
        year shall be used for carrying out subsection (b)(8) and not 
        more than one-third of the amount used in a fiscal year for 
        carrying out subsection (b)(8) may be used to carry out 
        subparagraph (B) of that subsection''.
    (c) Competitive Procedures for Awarding Grants.--Section 104 (33 
U.S.C. 1254(b)) is amended by adding at the end the following:
    ``(w) Competitive Procedures for Awarding Grants.--The 
Administrator shall establish procedures that, to the maximum extent 
practicable, promote competition and openness in the award of grants to 
nonprofit private agencies, institutions, and organizations under this 
section.''.

SEC. 102. STATE MANAGEMENT ASSISTANCE.

    Section 106(a) (33 U.S.C. 1256(a)) is amended--
            (1) by striking ``and'' at the end of paragraph (1);
            (2) by striking the semicolon at the end of paragraph (2) 
        and inserting ``; and''; and
            (3) by inserting after paragraph (2) the following:
            ``(3) such sums as may be necessary for each of fiscal 
        years 1991 through 2003, and $250,000,000 for each of fiscal 
        years 2004 through 2008;''.

SEC. 103. WATERSHED PILOT PROJECTS.

    (a) Section Redesignation.--The second section 121 (33 U.S.C. 1274; 
relating to watershed pilot projects) is redesignated as section 122.
    (b) Pilot Projects.--Section 122 (as so redesignated) is amended--
            (1) in the section heading by striking ``wet weather''; and
            (2) in subsection (a)--
                    (A) in the matter preceding paragraph (1) by 
                striking ``wet weather discharge'';
                    (B) in paragraph (2) by inserting ``, including 
                low-impact development technologies'' before the period 
                at the end; and
                    (C) by adding at the end the following:
            ``(3) Watershed partnerships.--Efforts of municipalities 
        and property owners to demonstrate cooperative ways to address 
        nonpoint sources of pollution to reduce adverse impacts on 
        water quality.''.
    (c) Authorization of Appropriations.--Section 122(c)(1) (as so 
redesignated) is amended by striking ``for fiscal year 2004'' and 
inserting ``for each of fiscal years 2004 through 2008''.
    (d) Report to Congress.--Section 122(d) (as so redesignated) is 
amended by striking ``5 years'' and inserting ``7 years''.

               TITLE II--CONSTRUCTION OF TREATMENT WORKS

SEC. 201. SEWAGE COLLECTION SYSTEMS.

    Section 211 (33 U.S.C. 1291) is amended--
            (1) by striking the section designation and all that 
        follows through ``(a) No'' and inserting the following:

``SEC. 211. SEWAGE COLLECTION SYSTEMS.

    ``(a) In General.--No'';
            (2) in subsection (b) by inserting ``Population Density.--
        '' after ``(b)''; and
            (3) by striking subsection (c) and inserting the following:
    ``(c) Exceptions.--
            ``(1) Replacement and major rehabilitation.--
        Notwithstanding the requirement of subsection (a)(1) concerning 
        the existence of a collection system as a condition of 
        eligibility, a project for replacement or major rehabilitation 
        of a collection system existing on January 1, 2003, shall be 
        eligible for a grant under this title if the project otherwise 
        meets the requirements of subsection (a)(1) and meets the 
        requirement of paragraph (3).
            ``(2) New systems.--Notwithstanding the requirement of 
        subsection (a)(2) concerning the existence of a community as a 
        condition of eligibility, a project for a new collection system 
        to serve a community existing on January 1, 2003, shall be 
        eligible for a grant under this title if the project otherwise 
        meets the requirements of subsection (a)(2) and meets the 
        requirement of paragraph (3).
            ``(3) Requirement.--A project meets the requirement of this 
        paragraph if the purpose of the project is to accomplish the 
        objectives, goals, and policies of this Act by addressing an 
        adverse environmental condition existing on the date of 
        enactment of this paragraph.''.

SEC. 202. TREATMENT WORKS DEFINED.

    Section 212(2)(A) (33 U.S.C. 1292(2)(A)) is amended--
            (1) by striking ``any works, including site'';
            (2) by striking ``is used for ultimate'' and inserting 
        ``will be used for ultimate''; and
            (3) by inserting before the period at the end the 
        following: ``and acquisition of other lands, and interests in 
        lands, which are necessary for construction''.

SEC. 203. POLICY ON COST EFFECTIVENESS.

    Section 218(a) (33 U.S.C. 1298(a)) is amended by striking 
``combination of devices and systems'' and all that follows through 
``from such treatment;'' and inserting ``treatment works;''.

SEC. 204. PILOT PROGRAM FOR ALTERNATIVE WATER SOURCE PROJECTS.

    Section 220(j) (33 U.S.C. 1300(j)) is amended by striking ``2004'' 
and inserting ``2008''.

SEC. 205. SEWER OVERFLOW CONTROL GRANTS.

    (a) In General.--Section 221(c) (33 U.S.C. 1301) is amended to read 
as follows:
    ``(c) Financially Distressed Community Defined.--In subsection (b), 
the term `financially distressed community' means a community that 
meets affordability criteria established by the State in which the 
community is located under section 603(i)(2).''.
    (b) Administrative Requirements.--Section 221(e) (33 U.S.C. 
1301(e)) is amended to read as follows:
    ``(e) Administrative Requirements.--A project that receives 
assistance under this section shall be carried out subject to the same 
requirements as a project that receives assistance from a State water 
pollution control revolving fund under title VI, except to the extent 
that the Governor of the State in which the project is located 
determines that a requirement of title VI is inconsistent with the 
purposes of this section.''.
    (c) Authorization of Appropriations.--The first sentence of section 
221(f) (33 U.S.C. 1301(f)) is amended by inserting before the period at 
the end the following: ``such sums as may be necessary for fiscal year 
2004, and $250,000,000 for each of fiscal years 2005 through 2008''.
    (d) Allocation of Funds.--Section 221(g) (33 U.S.C. 1301(g)) is 
amended to read as follows:
    ``(g) Allocation of Funds.--
            ``(1) Fiscal year 2004.--Subject to subsection (h), the 
        Administrator shall use the amounts appropriated to carry out 
        this section for fiscal year 2004 for making grants to 
        municipalities and municipal entities under subsection (a)(2), 
        in accordance with the criteria set forth in subsection (b).
            ``(2) Fiscal year 2005 and thereafter.--Subject to 
        subsection (h), the Administrator shall use the amounts 
        appropriated to carry out this section for fiscal year 2005 and 
        each fiscal year thereafter for making grants to States under 
        subsection (a)(1), in accordance with a formula to be 
        established by the Administrator, after providing notice and an 
        opportunity for public comment, that allocates to each State a 
        proportional share of such amounts based on the total needs of 
        the State for municipal combined sewer overflow controls and 
        sanitary sewer overflow controls identified in the most recent 
        survey conducted pursuant to section 516(b)(1).''.
    (e) Reports.--The first sentence of section 221(i) (33 U.S.C. 
1301(i)) is amended by striking ``2003'' and inserting ``2007''.

        TITLE III--STATE WATER POLLUTION CONTROL REVOLVING FUNDS

SEC. 301. GENERAL AUTHORITY FOR CAPITALIZATION GRANTS.

    Section 601(a) (33 U.S.C. 1381(a)) is amended by striking ``for 
providing assistance'' and all that follows through the period at the 
end and inserting the following: ``to accomplish the objectives, goals, 
and policies of this Act by providing assistance for projects and 
activities identified in section 603(c).''.

SEC. 302. CAPITALIZATION GRANT AGREEMENTS.

    (a) Reporting Infrastructure Assets.--Section 602(b)(9) (33 U.S.C. 
1382(b)(9)) is amended by striking ``standards'' and inserting 
``standards, including standards relating to the reporting of 
infrastructure assets''.
    (b) Additional Requirements.--Section 602(b) (33 U.S.C. 1382(b)) is 
amended--
            (1) by striking ``and'' at the end of paragraph (9);
            (2) by striking the period at the end of paragraph (10) and 
        inserting a semicolon; and
            (3) by adding at the end the following:
            ``(11) the State will establish, maintain, invest, and 
        credit the fund with repayments, such that the fund balance 
        will be available in perpetuity for providing financial 
        assistance in accordance with this title;
            ``(12) any fees charged by the State to recipients of 
        assistance will be used for the sole purpose of financing the 
        cost of administering the fund;
            ``(13) beginning in fiscal year 2005, the State will 
        include as a condition of providing assistance to a 
        municipality or intermunicipal, interstate, or State agency 
        that the recipient of such assistance certify, with supporting 
        documentation, that the recipient--
                    ``(A) has studied and evaluated the cost and 
                effectiveness of innovative and alternative processes, 
                materials, and techniques for carrying out the proposed 
                project or activity for which assistance is sought 
                under this title, and has selected, to the extent 
                practicable, a project or activity that more 
                efficiently uses energy and natural and financial 
                resources or provides greater environmental benefits; 
                and
                    ``(B) has analyzed the cost and effectiveness of 
                alternative management and financing approaches 
                (including rate structures, issuance of bonds, 
                restructuring, regional alternatives, consolidation, 
                and public-private partnerships) for carrying out a 
                project or activity for which assistance is sought 
                under this title, taking into account the cost of 
                operating and maintaining the project or activity over 
                its life, as well as the cost of constructing the 
                project or activity;
            ``(14) the State will use at least 15 percent of the amount 
        of each capitalization grant received by the State under this 
        title after September 30, 2004, to provide assistance to 
        municipalities of fewer than 20,000 individuals that meet the 
        affordability criteria established by the State under section 
        603(i)(2) for activities included on the State's priority list 
        established under section 603(g), to the extent that there are 
        sufficient applications for such assistance; and
            ``(15) treatment works eligible under section 603(c)(1) 
        which will be constructed in whole or in part with funds 
        directly made available by capitalization grants under this 
        title and section 205(m) will meet the requirements of, or 
        otherwise be treated (as determined by the Governor of the 
        State) under sections 204(b)(1), 211, 218, and 511(c)(1) in the 
        same manner as treatment works constructed with assistance 
        under title II of this Act.''.

SEC. 303. WATER POLLUTION CONTROL REVOLVING LOAN FUNDS.

    (a) Projects and Activities Eligible for Assistance.--Section 
603(c) (33 U.S.C. 1383(c)) is amended to read as follows:
    ``(c) Projects and Activities Eligible for Assistance.--The amounts 
of funds available to each State water pollution control revolving fund 
shall be used only for providing financial assistance--
            ``(1) to any municipality or intermunicipal, interstate, or 
        State agency for construction of publicly owned treatment 
        works;
            ``(2) for the implementation of a management program 
        established under section 319;
            ``(3) for development and implementation of a conservation 
        and management plan under section 320;
            ``(4) for the implementation of lake protection programs 
        and projects under section 314;
            ``(5) for repair or replacement of decentralized wastewater 
        treatment systems that treat domestic sewage;
            ``(6) for measures to manage or reduce municipal stormwater 
        runoff;
            ``(7) to any municipality or intermunicipal, interstate, or 
        State agency for measures to reduce the demand for publicly 
        owned treatment works capacity through water conservation;
            ``(8) for measures to increase the security of publicly 
        owned treatment works; and
            ``(9) for the development and implementation of watershed 
        projects meeting the criteria set forth in section 122.''.
    (b) Extended Repayment Period.--Section 603(d)(1) (33 U.S.C. 
1383(d)(1)) is amended--
            (1) in subparagraph (A) by striking ``20 years'' and 
        inserting ``the lesser of 30 years or the design life of the 
        project to be financed with the proceeds of the loan''; and
            (2) in subparagraph (B) by striking ``not later than 20 
        years after project completion'' and inserting ``upon the 
        expiration of the term of the loan''.
    (c) Fiscal Sustainability Plan.--Section 603(d)(1) (33 U.S.C. 
1383(d)(1)) is further amended--
            (1) by striking ``and'' at the end of subparagraph (C);
            (2) by inserting ``and'' at the end of subparagraph (D); 
        and
            (3) by adding at the end the following:
                    ``(E) for any treatment works proposed for repair, 
                replacement, or expansion, and eligible for assistance 
                under section 603(c)(1), the recipient of a loan will 
                develop and implement a fiscal sustainability plan that 
                includes--
                            ``(i) an inventory of critical assets that 
                        are a part of the treatment works;
                            ``(ii) an evaluation of the condition and 
                        performance of inventoried assets or asset 
                        groupings; and
                            ``(iii) a plan for maintaining, repairing, 
                        and, as necessary, replacing the treatment 
                        works and a plan for funding such 
                        activities.''.
    (d) Administrative Expenses.--Section 603(d)(7) (33 U.S.C. 
1383(d)(7)) is amended by inserting before the period at the end the 
following: ``, $400,000 per year, or \1/5\ percent per year of the 
current valuation of the fund, whichever amount is greatest, plus the 
amount of any fees collected by the State for such purpose regardless 
of the source''.
    (e) Technical and Planning Assistance for Small Systems.--Section 
603(d) (33 U.S.C. 1383(d)) is amended--
            (1) by striking ``and'' at the end of paragraph (6);
            (2) by striking the period at the end of paragraph (7) and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(8) to provide owners and operators of small treatment 
        works (as defined in section 607) with technical and planning 
        assistance and assistance in financial management, user fee 
        analysis, budgeting, capital improvement planning, facility 
        operation and maintenance, repair schedules, and other 
        activities to improve wastewater treatment plant management and 
        operations; except that such amounts shall not exceed 2 percent 
        of grant awards to such fund under this title.''.
    (f) Additional Subsidization.--Section 603 (33 U.S.C. 1383) is 
amended by adding at the end the following:
    ``(i) Additional Subsidization.--
            ``(1) In general.--In any case in which a State provides 
        assistance to a municipality or intermunicipal, interstate, or 
        State agency under subsection (d), the State may provide 
        additional subsidization, including forgiveness of principal 
        and negative interest loans--
                    ``(A) to benefit a municipality that--
                            ``(i) meets the State's affordability 
                        criteria established under paragraph (2); or
                            ``(ii) does not meet the State's 
                        affordability criteria if the recipient--
                                    ``(I) seeks additional 
                                subsidization to benefit individual 
                                ratepayers in the residential user rate 
                                class;
                                    ``(II) demonstrates to the State 
                                that such ratepayers will experience a 
                                significant hardship from the increase 
                                in rates necessary to finance the 
                                project or activity for which 
                                assistance is sought; and
                                    ``(III) ensures, as part of an 
                                assistance agreement between the State 
                                and the recipient, that the additional 
                                subsidization provided under this 
                                paragraph is directed through a user 
                                charge rate system (or other 
                                appropriate method) to such ratepayers; 
                                or
                    ``(B) to implement alternative processes, 
                materials, and techniques (including nonstructural 
                protection of surface waters, new or improved methods 
                of waste treatment, and pollutant trading) that may 
                result in cost savings or increased environmental 
                benefit when compared to standard processes, materials, 
                and techniques.
            ``(2) Affordability criteria.--
                    ``(A) Establishment.--On or before September 30, 
                2004, and after providing notice and an opportunity for 
                public comment, a State shall establish affordability 
                criteria to assist in identifying municipalities that 
                would experience a significant hardship raising the 
                revenue necessary to finance a project or activity 
                eligible for assistance under section 603(c)(1) if 
                additional subsidization is not provided. Such criteria 
                shall be based on income data, population trends, and 
                other data determined relevant by the State.
                    ``(B) Existing criteria.--If a State has previously 
                established, after providing notice and an opportunity 
                for public comment, affordability criteria that meet 
                the requirements of subparagraph (A), the State may use 
                the criteria for the purposes of this subsection. For 
                purposes of this Act, any such criteria shall be 
                treated as affordability criteria established under 
                this paragraph.
                    ``(C) Information to assist states.--The 
                Administrator may publish information to assist States 
                in establishing affordability criteria under 
                subparagraph (A).
            ``(3) Priority.--A State may give priority to a recipient 
        for a project or activity eligible for funding under section 
        603(c)(1) if the recipient meets the State's affordability 
        criteria.
            ``(4) Set-aside.--
                    ``(A) In general.--In any fiscal year in which the 
                Administrator has available for obligation more than 
                $1,400,000,000 for the purposes of this title, a State 
                shall provide additional subsidization under this 
                subsection in the amount specified in subparagraph (B) 
                to eligible entities described in paragraph (1) for 
                projects and activities identified in the State's 
                intended use plan prepared under section 606(c) to the 
                extent that there are sufficient applications for such 
                assistance.
                    ``(B) Amount.--In a fiscal year described in 
                subparagraph (A), a State shall set aside for purposes 
                of subparagraph (A) an amount not less than 25 percent 
                of the difference between--
                            ``(i) the total amount that would have been 
                        allotted to the State under section 604 for 
                        such fiscal year if the amount available to the 
                        Administrator for obligation under this title 
                        for such fiscal year had been equal to 
                        $1,400,000,000; and
                            ``(ii) the total amount allotted to the 
                        State under section 604 for such fiscal year.
            ``(5) Limitation.--The total amount of additional 
        subsidization provided under this subsection by a State may not 
        exceed 30 percent of the total amount of capitalization grants 
        received by the State under this title in fiscal years 
        beginning after September 30, 2003.''.

SEC. 304. ALLOTMENT OF FUNDS.

    (a) In General.--Section 604(a) (33 U.S.C. 1384(a)) is amended to 
read as follows:
    ``(a) Allotments.--
            ``(1) Fiscal years 2003 and 2004.--Sums appropriated to 
        carry out this title for each of fiscal years 2003 and 2004 
        shall be allotted by the Administrator in accordance with the 
        formula used to allot sums appropriated to carry out this title 
        for fiscal year 2002.
            ``(2) Fiscal year 2005 and thereafter.--Sums appropriated 
        to carry out this title for fiscal year 2005 and each fiscal 
        year thereafter shall be allotted by the Administrator as 
        follows:
                    ``(A) Amounts that do not exceed $1,350,000,000 
                shall be allotted in accordance with the formula 
                described in paragraph (1).
                    ``(B) Amounts that exceed $1,350,000,000 shall be 
                allotted in accordance with the formula developed by 
                the Administrator under subsection (d).''.
    (b) Planning Assistance.--Section 604(b) (33 U.S.C. 1384(b)) is 
amended by striking ``1 percent'' and inserting ``2 percent''.
    (c) Formula.--Section 604 (33 U.S.C. 1384) is amended by adding at 
the end the following:
    ``(d) Formula Based on Water Quality Needs.--Not later than 
September 30, 2004, and after providing notice and an opportunity for 
public comment, the Administrator shall publish an allotment formula 
based on water quality needs in accordance with the most recent survey 
of needs developed by the Administrator under section 516(b).''.

SEC. 305. INTENDED USE PLAN.

    (a) Integrated Priority List.--Section 603(g) (33 U.S.C. 1383(g)) 
is amended to read as follows:
    ``(g) Priority List.--
            ``(1) In general.--For fiscal year 2005 and each fiscal 
        year thereafter, a State shall establish or update a list of 
projects and activities for which assistance is sought from the State's 
water pollution control revolving fund. Such projects and activities 
shall be listed in priority order based on the methodology established 
under paragraph (2). The State may provide financial assistance from 
the State's water pollution control revolving fund only with respect to 
a project or activity included on such list. In the case of projects 
and activities eligible for assistance under section 603(c)(2), the 
State may include a category or subcategory of nonpoint sources of 
pollution on such list in lieu of a specific project or activity.
            ``(2) Methodology.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of this paragraph, and after 
                providing notice and opportunity for public comment, 
                each State (acting through the State's water quality 
                management agency and other appropriate agencies of the 
                State) shall establish a methodology for developing a 
                priority list under paragraph (1).
                    ``(B) Priority for projects and activities that 
                achieve greatest water quality improvement.--In 
                developing the methodology, the State shall seek to 
                achieve the greatest degree of water quality 
                improvement, taking into consideration the requirement 
                of section 602(b)(5), section 603(i)(3), and whether 
                such water quality improvements would be realized 
                without assistance under this title.
                    ``(C) Considerations in selecting projects and 
                activities.--In determining which projects and 
                activities will achieve the greatest degree of water 
                quality improvement, the State shall consider--
                            ``(i) information developed by the State 
                        under sections 303(d) and 305(b);
                            ``(ii) the State's continuing planning 
                        process developed under section 303(e);
                            ``(iii) the State's management program 
                        developed under section 319; and
                            ``(iv) conservation and management plans 
                        developed under section 320.
                    ``(D) Nonpoint sources.--For categories or 
                subcategories of nonpoint sources of pollution that a 
                State may include on its priority list under paragraph 
                (1), the State may consider the cumulative water 
                quality improvements associated with projects or 
                activities in such categories or subcategories.
                    ``(E) Existing methodologies.--If a State has 
                previously developed, after providing notice and an 
                opportunity for public comment, a methodology that 
                meets the requirements of this paragraph, the State may 
                use the methodology for the purposes of this 
                subsection.''.
    (b) Intended Use Plan.--Section 606(c) (33 U.S.C. 1386(c)) is 
amended--
            (1) in the matter preceding paragraph (1) by striking 
        ``each State shall annually prepare'' and inserting ``each 
        State (acting through the State's water quality management 
        agency and other appropriate agencies of the State) shall 
        annually prepare and publish'';
            (2) by striking paragraph (1) and inserting the following:
            ``(1) the State's priority list developed under section 
        603(g);'';
            (3) by striking ``and'' at the end of paragraph (4);
            (4) by striking the period at the end of paragraph (5) and 
        inserting ``; and''; and
            (5) by adding at the end the following:
            ``(6) if the State does not fund projects and activities in 
        the order of the priority established under section 603(g), an 
        explanation of why such a change in order is appropriate.''.
    (c) Transitional Provision.--Before completion of a priority list 
based on a methodology established under section 603(g) of the Federal 
Water Pollution Control Act (as amended by this section), a State shall 
continue to comply with the requirements of sections 603(g) and 606(c) 
of such Act, as in effect on the day before the date of enactment of 
this Act.

SEC. 306. FEDERAL OVERSIGHT.

    (a) Annual Report.--Section 606(d) (33 U.S.C. 1386(d)) is amended 
by inserting ``the eligible purpose under section 603(c) for which the 
assistance is provided,'' after ``loan amounts,''.
    (b) Annual Federal Oversight Review.--Section 606(e) (33 U.S.C. 
1386(e)) is amended by adding at the end the following: ``In carrying 
out an oversight review under this subsection, the Administrator may 
allow a State to certify, with supporting documentation, its compliance 
with the requirements of this title.''.

SEC. 307. TECHNICAL ASSISTANCE.

    Title VI (33 U.S.C. 1381 et seq.) is amended--
            (1) by redesignating section 607 as section 608; and
            (2) by inserting after section 606 the following:

``SEC. 607. TECHNICAL ASSISTANCE.

    ``(a) Assistance for Small Treatment Works.--
            ``(1) Simplified procedures.--Not later than 1 year after 
        the date of enactment of this section, the Administrator shall 
        assist the States in establishing simplified procedures for 
        small treatment works to obtain assistance under this title.
            ``(2) Publication of manual.--Not later than 2 years after 
        the date of the enactment of this section, and after providing 
        notice and opportunity for public comment, the Administrator 
        shall publish a manual to assist small treatment works in 
        obtaining assistance under this title and publish in the 
        Federal Register notice of the availability of the manual.
            ``(3) Small treatment works defined.--For purposes of this 
        title, the term `small treatment works' means a treatment works 
        for which a municipality or intermunicipal, interstate, or 
        State agency seeks assistance under this title and which serves 
        a population of 20,000 or fewer.
    ``(b) Assistance for Improving the Management of Water Quality 
Infrastructure and Increasing Cost-Effectiveness of Infrastructure 
Improvements.--At the request of any State, the Administrator shall 
assist in the development of criteria for a State to determine 
compliance with the conditions of funding assistance established under 
section 602(b)(13).''.

SEC. 308. AUTHORIZATION OF APPROPRIATIONS.

    Section 608 (as redesignated by section 307 of this Act) is amended 
by striking paragraphs (1) through (5) and inserting the following:
            ``(1) $2,000,000,000 for fiscal year 2004;
            ``(2) $3,000,000,000 for fiscal year 2005;
            ``(3) $4,000,000,000 for fiscal year 2006;
            ``(4) $5,000,000,000 for fiscal year 2007; and
            ``(5) $6,000,000,000 for fiscal year 2008.''.

                      TITLE IV--GENERAL PROVISIONS

SEC. 401. DEFINITION OF TREATMENT WORKS.

    Section 502 (33 U.S.C. 1362) is amended by adding at the end the 
following:
            ``(24) The term `treatment works' has the meaning given 
        that term in section 212.''.

SEC. 402. FUNDING FOR INDIAN PROGRAMS.

    Section 518(c) (33 U.S.C. 1377) is amended--
            (1) by striking ``The Administrator'' and inserting the 
        following:
            ``(1) Fiscal years 1987-2003.--The Administrator'';
            (2) in paragraph (1) (as so designated)--
                    (A) by inserting ``and ending before October 1, 
                2003,'' after ``1986,''; and
                    (B) by striking the second sentence; and
            (3) by adding at the end the following:
            ``(2) Fiscal year 2004 and thereafter.--For fiscal year 
        2004 and each fiscal year thereafter, the Administrator shall 
        reserve, before allotments to the States under section 604(a), 
        not less than 0.5 percent and not more than 1.5 percent of the 
        funds made available to carry out title VI.
            ``(3) Use of funds.--Funds reserved under this subsection 
        shall be available only for grants for projects and activities 
        eligible for assistance under section 603(c) to serve--
                    ``(A) Indian tribes;
                    ``(B) former Indian reservations in Oklahoma (as 
                determined by the Secretary of the Interior); and
                    ``(C) Native villages (as defined in section 3 of 
                the Alaska Native Claims Settlement Act (43 U.S.C. 
                1602)).''.
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