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[House Report 108-675]
[From the U.S. Government Publishing Office]

108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-675

======================================================================

 
                      WATER QUALITY INVESTMENT ACT

                                _______
                                

 September 13, 2004.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

     Mr. Young of Alaska, from the Committee on Transportation and 
                Infrastructure, submitted the following

                              R E P O R T

                        [To accompany H.R. 784]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Transportation and Infrastructure, to whom 
was referred the bill (H.R. 784) to amend the Federal Water 
Pollution Control Act to authorize appropriations for sewer 
overflow control grants, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.
  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SEWER OVERFLOW CONTROL GRANTS.

  (a) Administrative Requirements.--Section 221(e) of the Federal Water 
Pollution Control Act (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.''.
  (b) Authorization of Appropriations.--The first sentence of section 
221(f) of such Act (33 U.S.C. 1301(f)) is amended by striking 
``$750,000,000'' and all that follows before the period and inserting 
``$250,000,000 for each of fiscal years 2005 through 2010''.
  (c) Allocation of Funds.--Section 221(g) of such Act (33 U.S.C. 
1301(g)) is amended to read as follows:
  ``(g) Allocation of Funds.--
          ``(1) Fiscal year 2005.--Subject to subsection (h), the 
        Administrator shall use the amounts appropriated to carry out 
        this section for fiscal year 2005 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 2006 and thereafter.--Subject to subsection 
        (h), the Administrator shall use the amounts appropriated to 
        carry out this section for fiscal year 2006 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.''.
  (d) Reports.--The first sentence of section 221(i) of such Act (33 
U.S.C. 1301(i)) is amended by striking ``2003'' and inserting ``2008''.

                       Purpose of the Legislation

    The purpose of H.R. 784, the ``Water Quality Investment Act 
of 2003,'' is to amend section 221 of the Federal Water 
Pollution Control Act (the Clean Water Act) to reauthorize 
appropriations for grants to municipalities and States to 
control combined sewer overflows and sanitary sewer overflows.

                  Background and Need for Legislation

    Combined sewer systems, which carry both storm water and 
sanitary (sewage) flows, and separate sanitary sewer systems 
can overflow with untreated waste during wet weather episodes 
such as rainfall or snow melts. These combined sewer overflows 
(CSOs) and sanitary sewer overflows (SSOs) may also occur 
outside of precipitation events because of insufficient system 
capacity, poor system design, inadequate maintenance, inflow 
from improper connections to the system, and infiltration from 
groundwater into deteriorated pipes, among other factors.
    CSOs and SSOs present significant public health and safety 
concerns because raw sewage can overflow into rivers, lakes, 
streets, parks, basements, and other areas of potential human 
exposure, adversely impacting public health and the 
environment. These discharges are among the major sources 
responsible for beach closures, shellfish restrictions, and 
exceedances of water quality standards.
    According to a December 2001 U.S. Environmental Protection 
Agency (EPA) Report to Congress, there are 772 communities 
across the United States that have combined sewer systems. 
These combined sewer systems have 9,471 built-in relief outlets 
designed to prevent wastewater flows in excess of system 
capacity from damaging the systems' treatment works, by 
allowing wastewater discharges (``overflows'') directly into 
nearby streams, rivers, lakes, or estuaries, instead of going 
to the treatment works. CSOs are found in 31 States and the 
District of Columbia, typically in older communities. EPA also 
has estimated that more than 40,000 SSOs per year occur from 
the nation's 19,500 separate sanitary sewer systems. SSOs can 
occur in streets, parks, basements, and other areas.
    CSOs are point source discharges regulated under the Clean 
Water Act, and are subject to permitting under the National 
Pollutant Discharge Elimination System (NPDES) by EPA or 
authorized States. Permits include technology-based standards 
determined on a case-by-case basis (rather than categorical 
standards) and any appropriate water quality standards. Under 
the CSO Control Policy issued by EPA in 1994, communities must 
adopt nine minimum controls and must develop long-term control 
plans. The CSO Control Policy requires these controls and plans 
to be incorporated into an NPDES permit or other enforceable 
mechanism that will ensure implementation by the CSO community. 
Section 402(q) of the Clean Water Act requires each permit, 
order, or decree issued after December 21, 2000, for a 
discharge from a municipal combined storm and sanitary sewer to 
conform to the 1994 CSO Control Policy.
    Correcting these problems is expensive. In its 2000 Clean 
Water Needs Survey, EPA estimated the cost to communities of 
addressing CSOs to be $50.6 billion, and the cost of addressing 
SSOs $88.5 billion.
    The vast majority of these costs will be borne by local 
communities and local ratepayers. Federal assistance has been 
small relative to the overall needs to address CSOs and SSOs. 
Through 2003, States have made approximately $3.4 billion in 
loans for CSOs from State Revolving Loan Funds (SRFs) and have 
made approximately $1.45 billion in loans to address the 
infiltration and inflow into sewer pipes that can cause SSOs. 
In addition, Congress earmarked over $600 million in EPA grants 
for 32 CSO communities between 1992 and 2001.
    To provide additional Federal assistance, in 2000, in P.L. 
106-554, Congress amended the Clean Water Act to add section 
221. Section 221 authorized appropriations of $750 million for 
each of fiscal years 2002 and 2003 for EPA to make grants to 
States and municipalities for controlling CSOs and SSOs. This 
authorization was conditioned upon the receipt of at least 
$1.35 billion in appropriations for the Clean Water State 
Revolving Loan Funds. No funds were appropriated for sewer 
overflow control grants in either fiscal year 2002 or 2003 and 
this authorization has expired.

                       Summary of the Legislation

Section 1. Sewer overflow control grants

    Subsection (a) amends section 221(e) of the Clean Water Act 
to require that a project that receives assistance under this 
section is to be carried out in accordance with the 
requirements for projects receiving assistance from State 
Revolving Loan Funds under title VI of the Clean Water Act, 
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. This 
section allows States to implement grants under section 221 in 
conjunction with a State's Revolving Loan Fund program.
    Subsection (b) amends section 221(f) of the Clean Water Act 
to authorize $1.5 billion in authority over six years, 
providing $250 million for each of fiscal years 2005 through 
2010.
    Subsection (c) amends section 221(g) of the Clean Water Act 
to update the provision for allocation of funds to reflect the 
new dates of authorization and reauthorized amounts. 
Specifically, consistent with section 221 as originally 
enacted, funding in the first year of authorization is to be 
used for direct grants by the Administrator to municipalities. 
For subsequent years, the Administrator is to allocate funds to 
States, in accordance with a needs-based formula established by 
the Administrator, and such funds are to be used by States to 
make grants to municipalities. This amendment also eliminates 
the set-aside of $250 million for the Administrator to make 
direct grants in the second year of authorization, because, as 
amended, $250 million is the total amount authorized in each 
fiscal year.
    Subsection (d) amends section 221(i) of the Clean Water Act 
to change the date the Administrator is required to transmit to 
Congress an initial report containing recommended funding 
levels for grants under this section from December 31, 2003, to 
December 31, 2008.

            Legislative History and Committee Consideration

    The Water Resources and Environment Subcommittee held a 
hearing on H.R. 784 and other pending legislation on July 8, 
2004. Testimony was presented by Representative Camp and a 
representative of the Association of Metropolitan Sewerage 
Agencies.
    The Water Resources and Environment Subcommittee met on 
July 15, 2004, to consider H.R. 784 and other legislation. The 
Subcommittee adopted by voice vote an amendment in the nature 
of a substitute. The amendment extended the authorization of 
appropriations of $1.5 billion for sewer overflow control 
grants to six years instead of two years, authorizing $250 
million for each of fiscal years 2005 through 2010. The 
amendment also made other changes to section 221 to update the 
authority and to ensure that States may administer these grants 
in the same way that they administer loans from the State 
Revolving Loan Funds. The Subcommittee reported the bill, as 
amended, favorably to the Committee on Transportation and 
Infrastructure, by voice vote.
    The Committee on Transportation and Infrastructure met in 
open session on July 21, 2004, and ordered the bill, as amended 
by the Subcommittee, reported to the House by voice vote.

                             Rollcall Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires each committee report to include the 
total number of votes cast for and against on each rollcall 
vote on a motion to report and on any amendment offered to the 
measure or matter, and the names of those members voting for 
and against. There were no recorded votes taken in connection 
with ordering H.R. 784 reported. A motion to order H.R. 784 
reported to the House was agreed to by voice vote.

                      Committee Oversight Findings

    With respect to the requirements of clause 3(c)(1) of rule 
XIII of the Rules of the House of Representatives, the 
Committee's oversight findings and recommendations are 
reflected in this report.

                          Cost of Legislation

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives does not apply where a cost estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974 has been timely submitted prior to the filing of the 
report and is included in the report. Such a cost estimate is 
included in this report.

                    Compliance With House Rule XIII

    1. With respect to the requirement of clause 3(c)(2) of 
rule XIII of the Rules of the House of Representatives, and 
308(a) of the Congressional Budget Act of 1974, the Committee 
references the report of the Congressional Budget Office 
included below.
    2. With respect to the requirement of clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, the 
performance goals and objectives of this legislation are to 
control combined sewer overflows and sanitary sewer overflows 
through additional planning, design, and construction of 
treatment works to intercept, transport, control, or treat CSOs 
and SSOs.
    3. With respect to the requirement of clause 3(c)(3) of 
rule XIII of the Rules of the House of Representatives and 
section 402 of the Congressional Budget Act of 1974, the 
Committee has received the following cost estimate for H.R. 784 
from the Director of the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 23, 2004.
Hon. Don Young,
Chairman, Committee on Transportation and Infrastructure,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 784, a bill to 
amend the Federal Water Pollution Control Act to authorize 
appropriations for sewer overflow grants.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Susanne S. 
Mehlman (for federal costs) and Gregory Waring (for the state 
and local impact).
            Sincerely,
                                         Elizabeth Robinson
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.
H.R. 784--A bill to amend the Federal Water Pollution Control Act to 
        authorize appropriations for sewer overflow control grants
    Summary: H.R. 784 would authorize appropriations of $250 
million annually over the 2005-2009 period for the 
Environmental Protection Agency (EPA) to provide grants to 
municipalities and states to control overflows of untreated 
waste that can occur during episodes of wet weather. Such 
overflows of sewage can pose a health and safety risk if they 
flow into rivers, lakes, and streets. This legislation also 
would permit states and municipalities to use the grant money 
to provide loans for eligible projects. CBO estimates that 
implementing this legislation would cost about $1.1 billion 
over the next five years, assuming appropriation of the 
authorized amounts. Enacting the bill would not affect direct 
spending or receipts.
    H.R. 784 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments. The bill would benefit publicly owned wastewater 
plants by reauthorizing grants to build, expand, or improve 
facilities to control sewer overflows. Any costs incurred by 
publicly owned water works would result from conditions of 
federal assistance.
    Estimated cost to the Federal Government: For this 
estimate, CBO assumes that the bill will be enacted near the 
end of fiscal year 2004 and that the amounts authorized will be 
appropriated for each fiscal year. Estimated outlays are based 
on historical spending patterns of similar grant programs. The 
estimated budgetary impact of H.R. 784 is shown in the 
following table. The costs of this legislation fall within 
budget function 300 (natural resources and the environment).

----------------------------------------------------------------------------------------------------------------
                                                                    By fiscal year, in millions of dollars--
                                                               -------------------------------------------------
                                                                  2005      2006      2007      2008      2009
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Authorization level...........................................       250       250       250       250       250
Estimated outlays.............................................       125       200       238       250       250
----------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: H.R. 784 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments. The bill would benefit publicly owned 
wastewater plants by reauthorizing grants to build, expand, or 
improve facilities to control sewer overflows. Any costs 
incurred by publicly owned water works would result from 
conditions of federal assistance.
    Estimate prepared by: Federal Costs: Susanne S. Mehlman; 
Impact on State, Local, and Tribal Government: Gregory Waring; 
and Impact on the Private Sector: Jean Talarico.
    Estimate approved by: Peter H. Fontaine; Deputy Assistant 
Director for Budget Analysis.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, committee reports on a bill or joint 
resolution of a public character shall include a statement 
citing the specific powers granted to the Congress in the 
Constitution to enact the measure. The Committee on 
Transportation and Infrastructure finds that Congress has the 
authority to enact this measure pursuant to its powers granted 
under article I, section 8 of the Constitution.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act (Public Law 104-4).

                        Preemption Clarification

    Section 423 of the Congressional Budget Act of 1974 
requires the report of any Committee on a bill or joint 
resolution to include a statement on the extent to which the 
bill or joint resolution is intended to preempt state, local, 
or tribal law. The Committee states that H.R. 784 does not 
preempt any state, local, or tribal law.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act are created by this 
legislation.

                Applicability to the Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act (Public Law 
104-1).

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

         SECTION 221 OF THE FEDERAL WATER POLLUTION CONTROL ACT

SEC. 221. SEWER OVERFLOW CONTROL GRANTS.

  (a) * * *

           *       *       *       *       *       *       *

  [(e) Administrative Reporting Requirements.--If a project 
receives grant assistance under subsection (a) and loan 
assistance from a State water pollution control revolving fund 
and the loan assistance is for 15 percent or more of the cost 
of the project, the project may be administered in accordance 
with State water pollution control revolving fund 
administrative reporting requirements for the purposes of 
streamlining such requirements.]
  (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.
  (f ) Authorization of Appropriations.--There is authorized to 
be appropriated to carry out this section [$750,000,000 for 
each of fiscal years 2002 and 2003] $250,000,000 for each of 
fiscal years 2005 through 2010. Such sums shall remain 
available until expended.
  [(g) Allocation of Funds.--
          [(1) Fiscal year 2002.--Subject to subsection (h), 
        the Administrator shall use the amounts appropriated to 
        carry out this section for fiscal year 2002 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 2003.--Subject to subsection (h), 
        the Administrator shall use the amounts appropriated to 
        carry out this section for fiscal year 2003 as follows:
                  [(A) Not to exceed $250,000,000 for making 
                grants to municipalities and municipal entities 
                under subsection (a)(2), in accordance with the 
                criteria set forth in subsection (b).
                  [(B) All remaining amounts 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).]
  (g) Allocation of Funds.--
          (1) Fiscal year 2005.--Subject to subsection (h), the 
        Administrator shall use the amounts appropriated to 
        carry out this section for fiscal year 2005 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 2006 and thereafter.--Subject to 
        subsection (h), the Administrator shall use the amounts 
        appropriated to carry out this section for fiscal year 
        2006 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.

           *       *       *       *       *       *       *

  (i) Reports.--Not later than December 31, [2003] 2008, and 
periodically thereafter, the Administrator shall transmit to 
Congress a report containing recommended funding levels for 
grants under this section. The recommended funding levels shall 
be sufficient to ensure the continued expeditious 
implementation of municipal combined sewer overflow and 
sanitary sewer overflow controls nationwide.

                                  
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