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[House Report 106-597]
[From the U.S. Government Publishing Office]

                                                                       
106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     106-597

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

 
                   LONG ISLAND SOUND RESTORATION ACT
                                _______
                                

  May 2, 2000.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Shuster, from the Committee on Transportation and Infrastructure, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 3313]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Transportation and Infrastructure, to whom 
was referred the bill (H.R. 3313) to amend section 119 of the 
Federal Water Pollution Control Act to reauthorize the program 
for Long Island Sound, and for other purposes, 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 out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Long Island Sound Restoration Act''.

SEC. 2. NITROGEN CREDIT TRADING SYSTEM AND OTHER MEASURES.

  Section 119(c)(1) of the Federal Water Pollution Control Act (33 
U.S.C. 1269(c)(1)) is amended by inserting ``, including efforts to 
establish, within the process for granting watershed general permits, a 
system for trading nitrogen credits and any other measures that are 
cost-effective and consistent with the goals of the Plan'' before the 
semicolon at the end.

SEC. 3. ASSISTANCE FOR DISTRESSED COMMUNITIES.

  Section 119 of the Federal Water Pollution Control Act (33 U.S.C. 
1269) is amended--
          (1) by redesignating subsection (e) as subsection (f); and
          (2) by inserting after subsection (d) the following:
  ``(e) Assistance to Distressed Communities.--
          ``(1) Eligible communities.--
                  ``(A) States to determine criteria.--For the purposes 
                of this subsection, a distressed community is any 
                community that meets affordability criteria established 
                by the State in which the community is located, if such 
                criteria are developed after public review and comment.
                  ``(B) Consideration of impact on water and sewer 
                rates.--In determining if a community is a distressed 
                community for the purposes of this subsection, the 
                State shall consider the extent to which the rate of 
                growth of a community's tax base has been historically 
                slow such that implementing the plan described in 
                subsection (c)(1) would result in a significant 
                increase in any water or sewer rate charged by the 
                community's publicly-owned wastewater treatment 
                facility.
                  ``(C) Information to assist states.--The 
                Administrator may publish information to assist States 
                in establishing affordability criteria under 
                subparagraph (A).
          ``(2) Revolving loan funds.--
                  ``(A) Loan subsidies.--Subject to subparagraph (B), 
                any State making a loan to a distressed community from 
                a revolving fund under title VI for the purpose of 
                assisting the implementation of the plan described in 
                subsection (c)(1) may provide additional subsidization 
                (including forgiveness of principal).
                  ``(B) Total amount of subsidies.--For each fiscal 
                year, the total amount of loan subsidies made by a 
                State under subparagraph (A) may not exceed 30 percent 
                of the amount of the capitalization grant received by 
                the State for the year.
          ``(3) Priority.--In making assistance available under this 
        section for the upgrading of wastewater treatment facilities, a 
        State may give priority to a distressed community.''.

SEC. 4. REAUTHORIZATION OF APPROPRIATIONS.

  Section 119(f) of the Federal Water Pollution Control Act (as 
redesignated by section 3 of this Act) is amended--
          (1) in paragraph (1), by striking ``1991 through 2001'' and 
        inserting ``2000 through 2003''; and
          (2) in paragraph (2), by striking ``not to exceed $3,000,000 
        for each of the fiscal years 1991 through 2001'' and inserting 
        ``not to exceed $80,000,000 for each of fiscal years 2000 
        through 2003''.

                          Purpose and Summary

    The purpose of H.R. 3313 is to reauthorize and improve the 
Long Island Sound program under the Clean Water Act.

                  Background and Need for Legislation

    Long Island Sound is approximately 110 miles long and 21 
miles across at its widest point. More than 8 million people 
live within the Long Island Sound watershed, which is bordered 
by the states of New York and Connecticut. Studies estimate the 
Sound generates more than $5 billion a year for the regional 
economy from boating, swimming, and commercial and sport 
fishing, among other activities. The Long Island Sound, like 
many estuaries across the U.S., supports multiple uses and 
demands, and provides habitat for a multitude of fish and 
wildlife species. Increasing population growth and development 
have led to water quality problems arising from increased 
nonpoint source pollution from stormwater and agricultural 
runoff, wastewater discharges with high nitrogen levels, 
industrial pollution, and commercial and recreational waste.
    An estimated $1 billion will be needed over the next 20 
years to address the environmental and public health problems 
in the Sound. Much of this cost is associated with sewage 
treatment plant upgrades to control nitrogen discharges into 
the Sound. To meet nitrogen reduction goals in a cost-effective 
manner, Connecticut has been working cooperatively with EPA on 
the development of a nitrogen credit trading program.
    Long Island Sound is one of the estuaries in EPA's National 
Estuary Program (NEP), established under section 320 of the 
Clean Water Act. EPA approved the Comprehensive Conservation 
and Management Plan (CCMP) for Long Island Sound in September 
1994. The CCMP resulted from the Long Island Sound Study, which 
was a cooperative effort involving researchers, federal, state, 
and local regulators, user groups, and other stakeholders to 
research and monitor Sound conditions, identify priority 
problems, and develop strategies to address them. NEP funding 
for the Long Island Sound has been approximately $300,000 
annually for the past several years.
    Clean Water Act Section 119, added in 1990, established the 
EPA Long Island Sound Program Office in the vicinity of the 
Sound, for the purpose of carrying out the goals of the CCMP, 
coordinating federal and regional Long Island Sound activities, 
conducting studies, convening state and local legislative 
conferences, and providing technical support to the management 
conference, among other activities. EPA funding for the Long 
Island Sound office has ranged from $700,000 in 1997 up to 
$975,000 in 2000.
    H.R. 3313 reauthorizes funding for the Long Island Sound 
program and authorizes funding for grants and studies to 
implement the CCMP at an amount not to exceed $80 million a 
year for fiscal years 2000 through 2003. The bill also directs 
EPA's Long Island Sound Office to include, as part of its 
assistance and support of CCMP implementation, efforts to 
establish a nitrogen credit trading program (and any other 
cost-effective measures consistent with the CCMP) within the 
process of granting a watershed general permit. The bill 
authorizes states to provide additional subsidization, 
including forgiveness of principal for loans to designated 
distressed communities from a state's clean water state 
revolving fund, directs the states to establish affordability 
criteria for such a designation, and authorizes EPA to provide 
guidance on affordability criteria.

      Discussion of Committee Bill and Section-by-Section Analysis

Section 1. Short title

    Provides that the Act may be cited as the ``Long Island 
Sound Restoration Act.''

Section 2. Nitrogen credit trading system and other measures

    Section 2 of this legislation amends section 119(c)(1) of 
the Clean Water Act to require the Office to assist and support 
a system for trading nitrogen credits and any other measures 
that are cost-effective and consistent with the goals of the 
CCMP for Long Island Sound. This assistance and support is to 
be provided under the existing authorities for the Clean Water 
Act and the laws of New York and Connecticut, or any subsequent 
amendments to such authorities or laws. This amendment does not 
affect any existing regulatory authorities under the Clean 
Water Act.
    The Long Island Sound Study identified nitrogen as a key 
factor causing low dissolved oxygen levels in Long Island 
Sound. The nitrogen Total Maximum Daily Load for Long Island 
Sound that New York and Connecticut are developing will require 
a 58.5 percent nitrogen load reduction. To meet this reduction 
in a cost-effective manner, Connecticut plans to institute a 
nitrogen credit trading program, which the Long Island Sound 
Study has helped to develop.

Section 3. Assistance for distressed communities

    Amends section 119 by adding a new section authorizing New 
York and Connecticut to use their state revolving loan funds, 
established under title VI of the Clean Water Act, to provide 
additional subsidization when making a loan to a distressed 
community for the purposes of assisting the implementation of 
the CCMP for Long Island Sound. This subsidization may include 
forgiveness of principal. The total amount of loan subsidies 
made by a state may not exceed 30 percent of the amount of the 
capitalization grant received by the state for the year.
    Under this section, the states of New York and Connecticut 
would establish affordability criteria, after public review and 
comment, to be used to determine which communities are 
distressed. In establishing these criteria, the states must 
consider the extent to which the rate of growth of a 
community's tax base has been historically slow such that 
implementing the CCMP would result in significant increases in 
any water or sewer rate charged by the community's publicly-
owned wastewater treatment facility.EPA is authorized to 
publish information to assist states in establishing affordability 
criteria.
    In its hearing on H.R. 3313, the Committee received 
testimony indicating that some communities in New York and 
Connecticut would have difficulty paying to add the 
denitrification equipment to their wastewater treatment 
facilities needed to meet the goals outlined in the CCMP. EPA, 
Connecticut and New York are encouraged to fully consider the 
financial stress the cleanup effort will place on the budgets 
of many small towns when distributing the authorized funds and 
to take advantage of the additional authorities provided in the 
bill for helping municipalities fulfill their obligations under 
the CCMP.
    Under the reported bill, funding under section 119, as 
amended, providing for construction of projects that are 
treatment works as defined in the Clean Water Act, will be 
subject to the requirements of the Davis-Bacon Act as provided 
in section 513 of the Clean Water Act. The Committee is aware 
that some of the construction funded under section 119 may not 
come within the definition of treatment works. The Committee 
has not addressed the issue of whether these construction 
projects should be covered by the Davis-Bacon Act, and the 
reported bill should not be considered as a precedent on this 
issue.

Section 4. Reauthorization of appropriations

    Amends section 119(f) to reauthorize funding to carry out 
the duties of the Long Island Sound Office through fiscal year 
2003. In addition, this section authorizes $80,000,000 a year 
for each of fiscal years 2000 through 2003 to carry out section 
119(d).

                                Hearings

    On February 29, 2000, the Water Resources and Environment 
Subcommittee held a hearing on H.R. 3313 and other legislation. 
Testimony on H.R. 3313 was given by, among others, New York 
Governor George Pataki, Connecticut Governor John Rowland, 
Representative Shays (CT), Representative Johnson (CT), 
Representative Lazio (NY), and Representative Ackerman (NY). In 
addition, testimony on this legislation was given by 
representatives of the National Audubon Society of New York, 
Construction Industry Council of Westchester and Hudson Valley, 
and Save The Sound, Inc.

                        Committee Consideration

    On April 5, 2000, the Water Resources and Environment 
Subcommittee reported H.R. 3313, by unanimous voice vote, 
favorably to the Full Committee. The Subcommittee adopted an 
amendment to change the subsidy for distressed communities from 
only offering a negative interest rate to a broader array of 
options, including principal forgiveness. The amendment also 
capped the amount of such subsidies based on the annual 
capitalization grant received by the State.
    On April 11, 2000, the Full Committee met in open session 
and ordered the bill reported to the House by unanimous voice 
vote.

                             Rollcall Votes

    Clause 3(b) of rule XIII of the House of Representatives 
requires each committee report to include the total number of 
votes cast for and against on each roll call 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. 3313 reported.

                      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(d)(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 
Committee has received no report of oversight findings and 
recommendations from the Committee on Government Reform and 
Oversight on the subject of H.R. 3313.
    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. 
3313 from the Director of the Congressional Budget Office.

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 21, 2000.
Hon. Bud Shuster,
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. 3313, the Long 
Island Sound Restoration Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susanne S. 
Mehlman (for federal costs) and Victoria Heid Hall (for the 
state and local impact).
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

               congressional budget office cost estimate

H.R. 3313--Long Island Sound Restoration Act

    Summary: H.R. 3313 would extend and increase the 
authorization of appropriations over the 2000-2003 period for 
the Environmental Protection Agency's (EPA's) Long Island Sound 
program office. Under current law, the program is authorized to 
receive appropriations of $3 million annually through 2001. 
This bill would authorize the appropriation of up to $80 
million annually over the 2000-2003 period for EPA to make 
additional grants to states and support efforts to establish a 
trading program among entities in the region to exchange the 
rights to emit nitrogen compounds into the Long Island Sound 
watershed. In addition, enacting H.R. 3313 would give states 
more flexibility in allocating funds from their revolving funds 
to distressed communities with regard to the conservation and 
management plan for Long Island Sound. While federal funds are 
included in such revolving funds, CBO does not estimate that 
enacting this provision would result in any significant impact 
on the federal budget.
    CBO estimates that implementing this legislation would cost 
$237 million over the 2000-2005 period, assuming appropriation 
of the authorized amounts. The bill would not affect direct 
spending or receipts; therefore, pay-as-you-go procedures would 
not apply. H.R. 3313 contains no intergovernmental mandates or 
private-sector mandates as defined in the Unfunded Mandates 
Reform Act (UMRA) and would impose no costs on state, local, or 
tribal governments.
    Estimated cost to the Federal Government: For purposes of 
this estimate, CBO assumes that the amounts authorized will be 
appropriated for each fiscal year and that outlays will follow 
the pattern of similar EPA programs. The estimated impact of 
H.R. 3313 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--
                                                                 -----------------------------------------------
                                                                   2000    2001    2002    2003    2004    2005
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Spending under current law:
    Estimated authorization level \1\...........................       1       3       0       0       0       0
    Estimated Outlays...........................................       1       2       1       1   (\2\)       0
Proposed changes:
    Estimated authorization level...............................      79      77      80      80       0       0
    Estimated Outlays...........................................       2      18      39      63      63      52
Spending under H.R. 3313:
    Estimated authorization level...............................      80      80      80      80       0       0
    Estimated Outlays...........................................       3      20      40      64      63      52
----------------------------------------------------------------------------------------------------------------
\1\ The 2000 level is the amount appropriated for that year for the Long Island Sound program at EPA. Under
  current law, $3 million is authorized to be appropriated for this program in 2001.
\2\ Less than $500,000.

    Pay-as-you-go considerations: None.
    Intergovernmental and private-sector impact: H.R. 3313 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments. Enacting the legislation would allow states 
more flexibility, under permission regarding the Long Island 
Sound, to prioritize certain loans to distressed communities 
and to subsidize those loans. Such subsidies would be provided 
by states voluntarily.
    Previous CBO estimate: On October 7, 1999, CBO transmitted 
a cost of estimate for S. 1632, a bill to extend the 
authorization of appropriations for activities at Long Island 
Sound, as ordered reported by the Senate Committee on 
Environment and Public Works on September 29, 1999. In contrast 
to H.R. 3313, S. 1632 would extend and increase the 
authorization of appropriations for the Long Island Sound 
program office by up to $10 million for each of fiscal years 
2000 through 2005.
    Estimate prepared by: Federal costs: Susanne S. Mehlman; 
Impact on State, local and tribal governments: Victoria Heid 
Hall; impact on the private sector: Jean Wooster.
    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.)

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were 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 119 OF THE FEDERAL WATER POLLUTION CONTROL ACT

  Sec. 119. Long Island Sound.--(a) * * *

           *       *       *       *       *       *       *

  (c) Duties of the Office.--The Office shall assist the 
Management Conference of the Long Island Sound Study in 
carrying out its goals. Specifically, the Office shall--
          (1) assist and support the implementation of the 
        Comprehensive Conservation and Management Plan for Long 
        Island Sound developed pursuant to section 320 of this 
        Act, including efforts to establish, within the process 
        for granting watershed general permits, a system for 
        trading nitrogen credits and any other measures that 
        are cost-effective and consistent with the goals of the 
        Plan;

           *       *       *       *       *       *       *

  (e) Assistance to Distressed Communities.--
          (1) Eligible communities.--
                  (A) States to determine criteria.--For the 
                purposes of this subsection, a distressed 
                community is any community that meets 
                affordability criteria established by the State 
                in which the community is located, if such 
                criteria are developed after public review and 
                comment.
                  (B) Consideration of impact on water and 
                sewer rates.--In determining if a community is 
                a distressed community for the purposes of this 
                subsection, the State shall consider the extent 
                to which the rate of growth of a community's 
                tax base has been historically slow such that 
                implementing the plan described in subsection 
                (c)(1) would result in a significant increase 
                in any water or sewer rate charged by the 
                community's publicly-owned wastewater treatment 
                facility.
                  (C) Information to assist states.--The 
                Administrator may publish information to assist 
                States in establishing affordability criteria 
                under subparagraph (A).
          (2) Revolving loan funds.--
                  (A) Loan subsidies.--Subject to subparagraph 
                (B), any State making a loan to a distressed 
                community from a revolving fund under title VI 
                for the purpose of assisting the implementation 
                of the plan described in subsection (c)(1) may 
                provide additional subsidization (including 
                forgiveness of principal).
                  (B) Total amount of subsidies.--For each 
                fiscal year, the total amount of loan subsidies 
                made by a State under subparagraph (A) may not 
                exceed 30 percent of the amount of the 
                capitalization grant received by the State for 
                the year.
          (3) Priority.--In making assistance available under 
        this section for the upgrading of wastewater treatment 
        facilities, a State may give priority to a distressed 
        community.
  [(e)] (f) Authorizations.--(1) There is authorized to be 
appropriated to the Administrator for the implementation of 
this section, other than subsection (d), such sums as may be 
necessary for each of the fiscal years [1991 through 2001] 2000 
through 2003.
  (2) There is authorized to be appropriated to the 
Administrator for the implementation of subsection (d) [not to 
exceed $3,000,000 for each of the fiscal years 1991 through 
2001] not to exceed $80,000,000 for each of fiscal years 2000 
through 2003.

           *       *       *       *       *       *       *

                                  
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