I 

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.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) IN GENERAL.—This Act may be cited as the 

5 ‘‘Water Quality Financing Act of 2003’’. 

6 (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. 
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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.

1 SEC. 2. AMENDMENT OF FEDERAL WATER POLLUTION CON2 TROL ACT. 

3 Except as otherwise expressly provided, whenever in 

4 this Act an amendment or repeal is expressed in terms 

5 of an amendment to, or repeal of, a section or other provi6 sion, the reference shall be considered to be made to a 

7 section or other provision of the Federal Water Pollution 

8 Control Act (33 U.S.C. 1251 et seq.). 
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1 TITLE I—TECHNICAL AND 

2 MANAGEMENT ASSISTANCE 

3 SEC. 101. TECHNICAL ASSISTANCE. 

4 (a) TECHNICAL ASSISTANCE FOR RURAL AND SMALL

5 TREATMENT WORKS.—Section 104(b) (33 U.S.C. 

6 1254(b)) is amended—

7 (1) by striking ‘‘and’’ at the end of paragraph 

8 (6); 

9 (2) by striking the period at the end of para10 graph (7) and inserting ‘‘; and’’; and 

11 (3) by adding at the end the following: 

12 ‘‘(8) make grants to nonprofit organizations—

13 ‘‘(A) to provide technical assistance to 

14 rural and small municipalities for the purpose 

15 of assisting, in consultation with the State in 

16 which the assistance is provided, such munici17 palities in the planning, developing, and acquisi18 tion of financing for wastewater infrastructure 

19 assistance; 

20 ‘‘(B) to capitalize revolving loan funds for 

21 the purpose of providing loans, in consultation 

22 with the State in which the assistance is pro23 vided, to rural and small municipalities for 

24 predevelopment costs associated with waste25 water infrastructure projects or short-term 
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1 costs incurred for equipment replacement that 

2 is not part of regular operation and mainte3 nance activities for existing wastewater systems, 

4 subject to the conditions that any loan from the 

5 fund will be made at a below market interest 

6 rate, for a term not to exceed 10 years, and in 

7 an amount not to exceed $100,000 and that all 

8 loan repayments will be credited to the fund; 

9 ‘‘(C) to provide technical assistance and 

10 training for rural and small publicly owned 

11 treatment works and decentralized wastewater 

12 treatment systems to enable such treatment 

13 works and systems to protect water quality and 

14 achieve and maintain compliance with the re15 quirements of this Act; and 

16 ‘‘(D) to disseminate information to rural 

17 and small municipalities and municipalities that 

18 meet the affordability criteria established under 

19 section 603(i)(2) by the State in which the mu20 nicipality is located with respect to planning, 

21 design, construction, and operation of publicly 

22 owned treatment works and decentralized 

23 wastewater treatment systems.’’. 

24 (b) AUTHORIZATION OF APPROPRIATIONS.—Section 

25 104(u) (33 U.S.C. 1254(u)) is amended—
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1 (1) by striking ‘‘and (6)’’ and inserting ‘‘(6)’’; 

2 and 

3 (2) by inserting before the period at the end the 

4 following: ‘‘; and (7) not to exceed $75,000,000 for 

5 each of fiscal years 2004 through 2008 for carrying 

6 out subsections (b)(3) and (b)(8), except that not 

7 less than 20 percent of the amounts appropriated 

8 pursuant to this paragraph in a fiscal year shall be 

9 used for carrying out subsection (b)(8) and not more 

10 than one-third of the amount used in a fiscal year 

11 for carrying out subsection (b)(8) may be used to 

12 carry out subparagraph (B) of that subsection’’. 

13 (c) COMPETITIVE PROCEDURES FOR AWARDING

14 GRANTS.—Section 104 (33 U.S.C. 1254(b)) is amended 

15 by adding at the end the following: 

16 ‘‘(w) COMPETITIVE PROCEDURES FOR AWARDING

17 GRANTS.—The Administrator shall establish procedures 

18 that, to the maximum extent practicable, promote com19 petition and openness in the award of grants to nonprofit 

20 private agencies, institutions, and organizations under this 

21 section.’’. 

22 SEC. 102. STATE MANAGEMENT ASSISTANCE. 

23 Section 106(a) (33 U.S.C. 1256(a)) is amended—

24 (1) by striking ‘‘and’’ at the end of paragraph 

25 (1); 
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1 (2) by striking the semicolon at the end of 

2 paragraph (2) and inserting ‘‘; and’’; and 

3 (3) by inserting after paragraph (2) the fol4 lowing: 

5 ‘‘(3) such sums as may be necessary for each 

6 of fiscal years 1991 through 2003, and 

7 $250,000,000 for each of fiscal years 2004 through 

8 2008;’’. 

9 SEC. 103. WATERSHED PILOT PROJECTS. 

10 (a) SECTION REDESIGNATION.—The second section 

11 121 (33 U.S.C. 1274; relating to watershed pilot projects) 

12 is redesignated as section 122. 

13 (b) PILOT PROJECTS.—Section 122 (as so redesig14 nated) is amended—

15 (1) in the section heading by striking ‘‘WET

16 WEATHER’’; and 

17 (2) in subsection (a)—

18 (A) in the matter preceding paragraph (1) 

19 by striking ‘‘wet weather discharge’’; 

20 (B) in paragraph (2) by inserting ‘‘, in21 cluding low-impact development technologies’’ 

22 before the period at the end; and 

23 (C) by adding at the end the following: 

24 ‘‘(3) WATERSHED PARTNERSHIPS.—Efforts of 

25 municipalities and property owners to demonstrate 
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1 cooperative ways to address nonpoint sources of pol2 lution to reduce adverse impacts on water quality.’’. 

3 (c) AUTHORIZATION OF APPROPRIATIONS.—Section 

4 122(c)(1) (as so redesignated) is amended by striking ‘‘for 

5 fiscal year 2004’’ and inserting ‘‘for each of fiscal years 

6 2004 through 2008’’. 

7 (d) REPORT TO CONGRESS.—Section 122(d) (as so 

8 redesignated) is amended by striking ‘‘5 years’’ and insert9 ing ‘‘7 years’’. 

10 TITLE II—CONSTRUCTION OF 

11 TREATMENT WORKS 

12 SEC. 201. SEWAGE COLLECTION SYSTEMS. 

13 Section 211 (33 U.S.C. 1291) is amended—

14 (1) by striking the section designation and all 

15 that follows through ‘‘(a) No’’ and inserting the fol16 lowing: 

17 ‘‘SEC. 211. SEWAGE COLLECTION SYSTEMS. 

18 ‘‘(a) IN GENERAL.—No’’; 

19 (2) in subsection (b) by inserting ‘‘POPULATION

20 DENSITY.—’’ after ‘‘(b)’’; and 

21 (3) by striking subsection (c) and inserting the 

22 following: 

23 ‘‘(c) EXCEPTIONS.—

24 ‘‘(1) REPLACEMENT AND MAJOR REHABILITA25 TION.—Notwithstanding the requirement of sub-
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1 section (a)(1) concerning the existence of a collection 

2 system as a condition of eligibility, a project for re3 placement or major rehabilitation of a collection sys4 tem existing on January 1, 2003, shall be eligible for 

5 a grant under this title if the project otherwise 

6 meets the requirements of subsection (a)(1) and 

7 meets the requirement of paragraph (3). 

8 ‘‘(2) NEW SYSTEMS.—Notwithstanding the re9 quirement of subsection (a)(2) concerning the exist10 ence of a community as a condition of eligibility, a 

11 project for a new collection system to serve a com12 munity existing on January 1, 2003, shall be eligible 

13 for a grant under this title if the project otherwise 

14 meets the requirements of subsection (a)(2) and 

15 meets the requirement of paragraph (3). 

16 ‘‘(3) REQUIREMENT.—A project meets the re17 quirement of this paragraph if the purpose of the 

18 project is to accomplish the objectives, goals, and 

19 policies of this Act by addressing an adverse envi20 ronmental condition existing on the date of enact21 ment of this paragraph.’’. 

22 SEC. 202. TREATMENT WORKS DEFINED. 

23 Section 212(2)(A) (33 U.S.C. 1292(2)(A)) is amend24 ed—

25 (1) by striking ‘‘any works, including site’’; 
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1 (2) by striking ‘‘is used for ultimate’’ and in2 serting ‘‘will be used for ultimate’’; and 

3 (3) by inserting before the period at the end the 

4 following: ‘‘and acquisition of other lands, and inter5 ests in lands, which are necessary for construction’’. 

6 SEC. 203. POLICY ON COST EFFECTIVENESS. 

7 Section 218(a) (33 U.S.C. 1298(a)) is amended by 

8 striking ‘‘combination of devices and systems’’ and all that 

9 follows through ‘‘from such treatment;’’ and inserting 

10 ‘‘treatment works;’’. 

11 SEC. 204. PILOT PROGRAM FOR ALTERNATIVE WATER 

12 SOURCE PROJECTS. 

13 Section 220(j) (33 U.S.C. 1300(j)) is amended by 

14 striking ‘‘2004’’ and inserting ‘‘2008’’. 

15 SEC. 205. SEWER OVERFLOW CONTROL GRANTS. 

16 (a) IN GENERAL.—Section 221(c) (33 U.S.C. 1301) 

17 is amended to read as follows: 

18 ‘‘(c) FINANCIALLY DISTRESSED COMMUNITY DE19 FINED.—In subsection (b), the term ‘financially distressed 

20 community’ means a community that meets affordability 

21 criteria established by the State in which the community 

22 is located under section 603(i)(2).’’. 

23 (b) ADMINISTRATIVE REQUIREMENTS.—Section 

24 221(e) (33 U.S.C. 1301(e)) is amended to read as follows:
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1 ‘‘(e) ADMINISTRATIVE REQUIREMENTS.—A project 

2 that receives assistance under this section shall be carried 

3 out subject to the same requirements as a project that 

4 receives assistance from a State water pollution control 

5 revolving fund under title VI, except to the extent that 

6 the Governor of the State in which the project is located 

7 determines that a requirement of title VI is inconsistent 

8 with the purposes of this section.’’. 

9 (c) AUTHORIZATION OF APPROPRIATIONS.—The first 

10 sentence of section 221(f) (33 U.S.C. 1301(f)) is amended 

11 by inserting before the period at the end the following: 

12 ‘‘such sums as may be necessary for fiscal year 2004, and 

13 $250,000,000 for each of fiscal years 2005 through 

14 2008’’. 

15 (d) ALLOCATION OF FUNDS.—Section 221(g) (33 

16 U.S.C. 1301(g)) is amended to read as follows: 

17 ‘‘(g) ALLOCATION OF FUNDS.—

18 ‘‘(1) FISCAL YEAR 2004.—Subject to subsection 

19 (h), the Administrator shall use the amounts appro20 priated to carry out this section for fiscal year 2004 

21 for making grants to municipalities and municipal 

22 entities under subsection (a)(2), in accordance with 

23 the criteria set forth in subsection (b). 

24 ‘‘(2) FISCAL YEAR 2005 AND THEREAFTER.—

25 Subject to subsection (h), the Administrator shall 
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1 use the amounts appropriated to carry out this sec2 tion for fiscal year 2005 and each fiscal year there3 after for making grants to States under subsection 

4 (a)(1), in accordance with a formula to be estab5 lished by the Administrator, after providing notice 

6 and an opportunity for public comment, that allo7 cates to each State a proportional share of such 

8 amounts based on the total needs of the State for 

9 municipal combined sewer overflow controls and san10 itary sewer overflow controls identified in the most 

11 recent survey conducted pursuant to section 

12 516(b)(1).’’. 

13 (e) REPORTS.—The first sentence of section 221(i) 

14 (33 U.S.C. 1301(i)) is amended by striking ‘‘2003’’ and 

15 inserting ‘‘2007’’. 

16 TITLE III—STATE WATER POLLU17 TION CONTROL REVOLVING 

18 FUNDS 

19 SEC. 301. GENERAL AUTHORITY FOR CAPITALIZATION 

20 GRANTS. 

21 Section 601(a) (33 U.S.C. 1381(a)) is amended by 

22 striking ‘‘for providing assistance’’ and all that follows 

23 through the period at the end and inserting the following: 

24 ‘‘to accomplish the objectives, goals, and policies of this 
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1 Act by providing assistance for projects and activities 

2 identified in section 603(c).’’. 

3 SEC. 302. CAPITALIZATION GRANT AGREEMENTS. 

4 (a) REPORTING INFRASTRUCTURE ASSETS.—Section 

5 602(b)(9) (33 U.S.C. 1382(b)(9)) is amended by striking 

6 ‘‘standards’’ and inserting ‘‘standards, including stand7 ards relating to the reporting of infrastructure assets’’. 

8 (b) ADDITIONAL REQUIREMENTS.—Section 602(b) 

9 (33 U.S.C. 1382(b)) is amended—

10 (1) by striking ‘‘and’’ at the end of paragraph 

11 (9); 

12 (2) by striking the period at the end of para13 graph (10) and inserting a semicolon; and 

14 (3) by adding at the end the following: 

15 ‘‘(11) the State will establish, maintain, invest, 

16 and credit the fund with repayments, such that the 

17 fund balance will be available in perpetuity for pro18 viding financial assistance in accordance with this 

19 title; 

20 ‘‘(12) any fees charged by the State to recipi21 ents of assistance will be used for the sole purpose 

22 of financing the cost of administering the fund; 

23 ‘‘(13) beginning in fiscal year 2005, the State 

24 will include as a condition of providing assistance to 

25 a municipality or intermunicipal, interstate, or State 
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1 agency that the recipient of such assistance certify, 

2 with supporting documentation, that the recipient—

3 ‘‘(A) has studied and evaluated the cost 

4 and effectiveness of innovative and alternative 

5 processes, materials, and techniques for car6 rying out the proposed project or activity for 

7 which assistance is sought under this title, and 

8 has selected, to the extent practicable, a project 

9 or activity that more efficiently uses energy and 

10 natural and financial resources or provides 

11 greater environmental benefits; and 

12 ‘‘(B) has analyzed the cost and effective13 ness of alternative management and financing 

14 approaches (including rate structures, issuance 

15 of bonds, restructuring, regional alternatives, 

16 consolidation, and public-private partnerships) 

17 for carrying out a project or activity for which 

18 assistance is sought under this title, taking into 

19 account the cost of operating and maintaining 

20 the project or activity over its life, as well as 

21 the cost of constructing the project or activity; 

22 ‘‘(14) the State will use at least 15 percent of 

23 the amount of each capitalization grant received by 

24 the State under this title after September 30, 2004, 

25 to provide assistance to municipalities of fewer than 
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1 20,000 individuals that meet the affordability cri2 teria established by the State under section 

3 603(i)(2) for activities included on the State’s pri4 ority list established under section 603(g), to the ex5 tent that there are sufficient applications for such 

6 assistance; and 

7 ‘‘(15) treatment works eligible under section 

8 603(c)(1) which will be constructed in whole or in 

9 part with funds directly made available by capitaliza10 tion grants under this title and section 205(m) will 

11 meet the requirements of, or otherwise be treated 

12 (as determined by the Governor of the State) under 

13 sections 204(b)(1), 211, 218, and 511(c)(1) in the 

14 same manner as treatment works constructed with 

15 assistance under title II of this Act.’’. 

16 SEC. 303. WATER POLLUTION CONTROL REVOLVING LOAN 

17 FUNDS. 

18 (a) PROJECTS AND ACTIVITIES ELIGIBLE FOR AS19 SISTANCE.—Section 603(c) (33 U.S.C. 1383(c)) is amend20 ed to read as follows: 

21 ‘‘(c) PROJECTS AND ACTIVITIES ELIGIBLE FOR AS22 SISTANCE.—The amounts of funds available to each State 

23 water pollution control revolving fund shall be used only 

24 for providing financial assistance—
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1 ‘‘(1) to any municipality or intermunicipal, 

2 interstate, or State agency for construction of pub3 licly owned treatment works; 

4 ‘‘(2) for the implementation of a management 

5 program established under section 319; 

6 ‘‘(3) for development and implementation of a 

7 conservation and management plan under section 

8 320; 

9 ‘‘(4) for the implementation of lake protection 

10 programs and projects under section 314; 

11 ‘‘(5) for repair or replacement of decentralized 

12 wastewater treatment systems that treat domestic 

13 sewage; 

14 ‘‘(6) for measures to manage or reduce munic15 ipal stormwater runoff; 

16 ‘‘(7) to any municipality or intermunicipal, 

17 interstate, or State agency for measures to reduce 

18 the demand for publicly owned treatment works ca19 pacity through water conservation; 

20 ‘‘(8) for measures to increase the security of 

21 publicly owned treatment works; and 

22 ‘‘(9) for the development and implementation of 

23 watershed projects meeting the criteria set forth in 

24 section 122.’’. 
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1 (b) EXTENDED REPAYMENT PERIOD.—Section 

2 603(d)(1) (33 U.S.C. 1383(d)(1)) is amended—

3 (1) in subparagraph (A) by striking ‘‘20 years’’ 

4 and inserting ‘‘the lesser of 30 years or the design 

5 life of the project to be financed with the proceeds 

6 of the loan’’; and 

7 (2) in subparagraph (B) by striking ‘‘not later 

8 than 20 years after project completion’’ and insert9 ing ‘‘upon the expiration of the term of the loan’’. 

10 (c) FISCAL SUSTAINABILITY PLAN.—Section 

11 603(d)(1) (33 U.S.C. 1383(d)(1)) is further amended—

12 (1) by striking ‘‘and’’ at the end of subpara13 graph (C); 

14 (2) by inserting ‘‘and’’ at the end of subpara15 graph (D); and 

16 (3) by adding at the end the following: 

17 ‘‘(E) for any treatment works proposed for 

18 repair, replacement, or expansion, and eligible 

19 for assistance under section 603(c)(1), the re20 cipient of a loan will develop and implement a 

21 fiscal sustainability plan that includes—

22 ‘‘(i) an inventory of critical assets 

23 that are a part of the treatment works; 
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1 ‘‘(ii) an evaluation of the condition 

2 and performance of inventoried assets or 

3 asset groupings; and 

4 ‘‘(iii) a plan for maintaining, repair5 ing, and, as necessary, replacing the treat6 ment works and a plan for funding such 

7 activities.’’. 

8 (d) ADMINISTRATIVE EXPENSES.—Section 603(d)(7) 

9 (33 U.S.C. 1383(d)(7)) is amended by inserting before the 

10 period at the end the following: ‘‘, $400,000 per year, or 

1 11 ⁄5 percent per year of the current valuation of the fund, 

12 whichever amount is greatest, plus the amount of any fees 

13 collected by the State for such purpose regardless of the 

14 source’’. 

15 (e) TECHNICAL AND PLANNING ASSISTANCE FOR

16 SMALL SYSTEMS.—Section 603(d) (33 U.S.C. 1383(d)) is 

17 amended—

18 (1) by striking ‘‘and’’ at the end of paragraph 

19 (6); 

20 (2) by striking the period at the end of para21 graph (7) and inserting ‘‘; and’’; and 

22 (3) by adding at the end the following: 

23 ‘‘(8) to provide owners and operators of small 

24 treatment works (as defined in section 607) with 

25 technical and planning assistance and assistance in 
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1 financial management, user fee analysis, budgeting, 

2 capital improvement planning, facility operation and 

3 maintenance, repair schedules, and other activities 

4 to improve wastewater treatment plant management 

5 and operations; except that such amounts shall not 

6 exceed 2 percent of grant awards to such fund under 

7 this title.’’. 

8 (f) ADDITIONAL SUBSIDIZATION.—Section 603 (33 

9 U.S.C. 1383) is amended by adding at the end the fol10 lowing: 

11 ‘‘(i) ADDITIONAL SUBSIDIZATION.—

12 ‘‘(1) IN GENERAL.—In any case in which a 

13 State provides assistance to a municipality or inter14 municipal, interstate, or State agency under sub15 section (d), the State may provide additional sub16 sidization, including forgiveness of principal and 

17 negative interest loans—

18 ‘‘(A) to benefit a municipality that—

19 ‘‘(i) meets the State’s affordability 

20 criteria established under paragraph (2); 

21 or 

22 ‘‘(ii) does not meet the State’s afford23 ability criteria if the recipient—
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1 ‘‘(I) seeks additional subsidiza2 tion to benefit individual ratepayers in 

3 the residential user rate class; 

4 ‘‘(II) demonstrates to the State 

5 that such ratepayers will experience a 

6 significant hardship from the increase 

7 in rates necessary to finance the 

8 project or activity for which assistance 

9 is sought; and 

10 ‘‘(III) ensures, as part of an as11 sistance agreement between the State 

12 and the recipient, that the additional 

13 subsidization provided under this 

14 paragraph is directed through a user 

15 charge rate system (or other appro16 priate method) to such ratepayers; or 

17 ‘‘(B) to implement alternative processes, 

18 materials, and techniques (including non19 structural protection of surface waters, new or 

20 improved methods of waste treatment, and pol21 lutant trading) that may result in cost savings 

22 or increased environmental benefit when com23 pared to standard processes, materials, and 

24 techniques. 

25 ‘‘(2) AFFORDABILITY CRITERIA.—
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1 ‘‘(A) ESTABLISHMENT.—On or before Sep2 tember 30, 2004, and after providing notice 

3 and an opportunity for public comment, a State 

4 shall establish affordability criteria to assist in 

5 identifying municipalities that would experience 

6 a significant hardship raising the revenue nec7 essary to finance a project or activity eligible 

8 for assistance under section 603(c)(1) if addi9 tional subsidization is not provided. Such cri10 teria shall be based on income data, population 

11 trends, and other data determined relevant by 

12 the State. 

13 ‘‘(B) EXISTING CRITERIA.—If a State has 

14 previously established, after providing notice 

15 and an opportunity for public comment, afford16 ability criteria that meet the requirements of 

17 subparagraph (A), the State may use the cri18 teria for the purposes of this subsection. For 

19 purposes of this Act, any such criteria shall be 

20 treated as affordability criteria established 

21 under this paragraph. 

22 ‘‘(C) INFORMATION TO ASSIST STATES.—

23 The Administrator may publish information to 

24 assist States in establishing affordability cri25 teria under subparagraph (A). 
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1 ‘‘(3) PRIORITY.—A State may give priority to a 

2 recipient for a project or activity eligible for funding 

3 under section 603(c)(1) if the recipient meets the 

4 State’s affordability criteria. 

5 ‘‘(4) SET-ASIDE.—

6 ‘‘(A) IN GENERAL.—In any fiscal year in 

7 which the Administrator has available for obli8 gation more than $1,400,000,000 for the pur9 poses of this title, a State shall provide addi10 tional subsidization under this subsection in the 

11 amount specified in subparagraph (B) to eligi12 ble entities described in paragraph (1) for 

13 projects and activities identified in the State’s 

14 intended use plan prepared under section 

15 606(c) to the extent that there are sufficient 

16 applications for such assistance. 

17 ‘‘(B) AMOUNT.—In a fiscal year described 

18 in subparagraph (A), a State shall set aside for 

19 purposes of subparagraph (A) an amount not 

20 less than 25 percent of the difference be21 tween—

22 ‘‘(i) the total amount that would have 

23 been allotted to the State under section 

24 604 for such fiscal year if the amount 

25 available to the Administrator for obliga-
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1 tion under this title for such fiscal year 

2 had been equal to $1,400,000,000; and 

3 ‘‘(ii) the total amount allotted to the 

4 State under section 604 for such fiscal 

5 year. 

6 ‘‘(5) LIMITATION.—The total amount of addi7 tional subsidization provided under this subsection 

8 by a State may not exceed 30 percent of the total 

9 amount of capitalization grants received by the State 

10 under this title in fiscal years beginning after Sep11 tember 30, 2003.’’. 

12 SEC. 304. ALLOTMENT OF FUNDS. 

13 (a) IN GENERAL.—Section 604(a) (33 U.S.C. 

14 1384(a)) is amended to read as follows: 

15 ‘‘(a) ALLOTMENTS.—

16 ‘‘(1) FISCAL YEARS 2003 AND 2004.—Sums ap17 propriated to carry out this title for each of fiscal 

18 years 2003 and 2004 shall be allotted by the Admin19 istrator in accordance with the formula used to allot 

20 sums appropriated to carry out this title for fiscal 

21 year 2002. 

22 ‘‘(2) FISCAL YEAR 2005 AND THEREAFTER.—

23 Sums appropriated to carry out this title for fiscal 

24 year 2005 and each fiscal year thereafter shall be al25 lotted by the Administrator as follows: 
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1 ‘‘(A) Amounts that do not exceed 

2 $1,350,000,000 shall be allotted in accordance 

3 with the formula described in paragraph (1). 

4 ‘‘(B) Amounts that exceed $1,350,000,000 

5 shall be allotted in accordance with the formula 

6 developed by the Administrator under sub7 section (d).’’. 

8 (b) PLANNING ASSISTANCE.—Section 604(b) (33 

9 U.S.C. 1384(b)) is amended by striking ‘‘1 percent’’ and 

10 inserting ‘‘2 percent’’. 

11 (c) FORMULA.—Section 604 (33 U.S.C. 1384) is 

12 amended by adding at the end the following: 

13 ‘‘(d) FORMULA BASED ON WATER QUALITY

14 NEEDS.—Not later than September 30, 2004, and after 

15 providing notice and an opportunity for public comment, 

16 the Administrator shall publish an allotment formula 

17 based on water quality needs in accordance with the most 

18 recent survey of needs developed by the Administrator 

19 under section 516(b).’’. 

20 SEC. 305. INTENDED USE PLAN. 

21 (a) INTEGRATED PRIORITY LIST.—Section 603(g) 

22 (33 U.S.C. 1383(g)) is amended to read as follows: 

23 ‘‘(g) PRIORITY LIST.—

24 ‘‘(1) IN GENERAL.—For fiscal year 2005 and 

25 each fiscal year thereafter, a State shall establish or
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1 update a list of projects and activities for which as2 sistance is sought from the State’s water pollution 

3 control revolving fund. Such projects and activities 

4 shall be listed in priority order based on the method5 ology established under paragraph (2). The State 

6 may provide financial assistance from the State’s 

7 water pollution control revolving fund only with re8 spect to a project or activity included on such list. 

9 In the case of projects and activities eligible for as10 sistance under section 603(c)(2), the State may in11 clude a category or subcategory of nonpoint sources 

12 of pollution on such list in lieu of a specific project 

13 or activity. 

14 ‘‘(2) METHODOLOGY.—

15 ‘‘(A) IN GENERAL.—Not later than 1 year 

16 after the date of enactment of this paragraph, 

17 and after providing notice and opportunity for 

18 public comment, each State (acting through the 

19 State’s water quality management agency and 

20 other appropriate agencies of the State) shall 

21 establish a methodology for developing a pri22 ority list under paragraph (1). 

23 ‘‘(B) PRIORITY FOR PROJECTS AND AC24 TIVITIES THAT ACHIEVE GREATEST WATER

25 QUALITY IMPROVEMENT.—In developing the 
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1 methodology, the State shall seek to achieve the 

2 greatest degree of water quality improvement, 

3 taking into consideration the requirement of 

4 section 602(b)(5), section 603(i)(3), and wheth5 er such water quality improvements would be 

6 realized without assistance under this title. 

7 ‘‘(C) CONSIDERATIONS IN SELECTING

8 PROJECTS AND ACTIVITIES.—In determining 

9 which projects and activities will achieve the 

10 greatest degree of water quality improvement, 

11 the State shall consider—

12 ‘‘(i) information developed by the 

13 State under sections 303(d) and 305(b); 

14 ‘‘(ii) the State’s continuing planning 

15 process developed under section 303(e); 

16 ‘‘(iii) the State’s management pro17 gram developed under section 319; and 

18 ‘‘(iv) conservation and management 

19 plans developed under section 320. 

20 ‘‘(D) NONPOINT SOURCES.—For categories 

21 or subcategories of nonpoint sources of pollu22 tion that a State may include on its priority list 

23 under paragraph (1), the State may consider 

24 the cumulative water quality improvements as-
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1 sociated with projects or activities in such cat2 egories or subcategories. 

3 ‘‘(E) EXISTING METHODOLOGIES.—If a 

4 State has previously developed, after providing 

5 notice and an opportunity for public comment, 

6 a methodology that meets the requirements of 

7 this paragraph, the State may use the method8 ology for the purposes of this subsection.’’. 

9 (b) INTENDED USE PLAN.—Section 606(c) (33 

10 U.S.C. 1386(c)) is amended—

11 (1) in the matter preceding paragraph (1) by 

12 striking ‘‘each State shall annually prepare’’ and in13 serting ‘‘each State (acting through the State’s 

14 water quality management agency and other appro15 priate agencies of the State) shall annually prepare 

16 and publish’’; 

17 (2) by striking paragraph (1) and inserting the 

18 following: 

19 ‘‘(1) the State’s priority list developed under 

20 section 603(g);’’; 

21 (3) by striking ‘‘and’’ at the end of paragraph 

22 (4); 

23 (4) by striking the period at the end of para24 graph (5) and inserting ‘‘; and’’; and 

25 (5) by adding at the end the following: 
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1 ‘‘(6) if the State does not fund projects and ac2 tivities in the order of the priority established under 

3 section 603(g), an explanation of why such a change 

4 in order is appropriate.’’. 

5 (c) TRANSITIONAL PROVISION.—Before completion 

6 of a priority list based on a methodology established under 

7 section 603(g) of the Federal Water Pollution Control Act 

8 (as amended by this section), a State shall continue to 

9 comply with the requirements of sections 603(g) and 

10 606(c) of such Act, as in effect on the day before the date 

11 of enactment of this Act. 

12 SEC. 306. FEDERAL OVERSIGHT. 

13 (a) ANNUAL REPORT.—Section 606(d) (33 U.S.C. 

14 1386(d)) is amended by inserting ‘‘the eligible purpose 

15 under section 603(c) for which the assistance is provided,’’ 

16 after ‘‘loan amounts,’’. 

17 (b) ANNUAL FEDERAL OVERSIGHT REVIEW.—Sec18 tion 606(e) (33 U.S.C. 1386(e)) is amended by adding at 

19 the end the following: ‘‘In carrying out an oversight review 

20 under this subsection, the Administrator may allow a 

21 State to certify, with supporting documentation, its com22 pliance with the requirements of this title.’’. 

23 SEC. 307. TECHNICAL ASSISTANCE. 

24 Title VI (33 U.S.C. 1381 et seq.) is amended—
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1 (1) by redesignating section 607 as section 608; 

2 and 

3 (2) by inserting after section 606 the following: 

4 ‘‘SEC. 607. TECHNICAL ASSISTANCE. 

5 ‘‘(a) ASSISTANCE FOR SMALL TREATMENT

6 WORKS.—

7 ‘‘(1) SIMPLIFIED PROCEDURES.—Not later than 

8 1 year after the date of enactment of this section, 

9 the Administrator shall assist the States in estab10 lishing simplified procedures for small treatment 

11 works to obtain assistance under this title. 

12 ‘‘(2) PUBLICATION OF MANUAL.—Not later 

13 than 2 years after the date of the enactment of this 

14 section, and after providing notice and opportunity 

15 for public comment, the Administrator shall publish 

16 a manual to assist small treatment works in obtain17 ing assistance under this title and publish in the 

18 Federal Register notice of the availability of the 

19 manual. 

20 ‘‘(3) SMALL TREATMENT WORKS DEFINED.—

21 For purposes of this title, the term ‘small treatment 

22 works’ means a treatment works for which a munici23 pality or intermunicipal, interstate, or State agency 

24 seeks assistance under this title and which serves a 

25 population of 20,000 or fewer. 
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1 ‘‘(b) ASSISTANCE FOR IMPROVING THE MANAGE2 MENT OF WATER QUALITY INFRASTRUCTURE AND IN3 CREASING COST-EFFECTIVENESS OF INFRASTRUCTURE

4 IMPROVEMENTS.—At the request of any State, the Admin5 istrator shall assist in the development of criteria for a 

6 State to determine compliance with the conditions of fund7 ing assistance established under section 602(b)(13).’’. 

8 SEC. 308. AUTHORIZATION OF APPROPRIATIONS. 

9 Section 608 (as redesignated by section 307 of this 

10 Act) is amended by striking paragraphs (1) through (5) 

11 and inserting the following: 

12 ‘‘(1) $2,000,000,000 for fiscal year 2004; 

13 ‘‘(2) $3,000,000,000 for fiscal year 2005; 

14 ‘‘(3) $4,000,000,000 for fiscal year 2006; 

15 ‘‘(4) $5,000,000,000 for fiscal year 2007; and 

16 ‘‘(5) $6,000,000,000 for fiscal year 2008.’’.

17 TITLE IV—GENERAL 

18 PROVISIONS 

19 SEC. 401. DEFINITION OF TREATMENT WORKS. 

20 Section 502 (33 U.S.C. 1362) is amended by adding 

21 at the end the following: 

22 ‘‘(24) The term ‘treatment works’ has the 

23 meaning given that term in section 212.’’. 

24 SEC. 402. FUNDING FOR INDIAN PROGRAMS. 

25 Section 518(c) (33 U.S.C. 1377) is amended—
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1 (1) by striking ‘‘The Administrator’’ and insert2 ing the following: 

3 ‘‘(1) FISCAL YEARS 1987–2003.—The Adminis4 trator’’; 

5 (2) in paragraph (1) (as so designated)—

6 (A) by inserting ‘‘and ending before Octo7 ber 1, 2003,’’ after ‘‘1986,’’; and 

8 (B) by striking the second sentence; and 

9 (3) by adding at the end the following: 

10 ‘‘(2) FISCAL YEAR 2004 AND THEREAFTER.—

11 For fiscal year 2004 and each fiscal year thereafter, 

12 the Administrator shall reserve, before allotments to 

13 the States under section 604(a), not less than 0.5 

14 percent and not more than 1.5 percent of the funds 

15 made available to carry out title VI. 

16 ‘‘(3) USE OF FUNDS.—Funds reserved under 

17 this subsection shall be available only for grants for 

18 projects and activities eligible for assistance under 

19 section 603(c) to serve—

20 ‘‘(A) Indian tribes; 

21 ‘‘(B) former Indian reservations in Okla22 homa (as determined by the Secretary of the 

23 Interior); and 
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1 ‘‘(C) Native villages (as defined in section 

2 3 of the Alaska Native Claims Settlement Act 

3 (43 U.S.C. 1602)).’’.

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