12900 Federal Register / Vol. 62, No. 52 / Tuesday, March 18, 1997 / Notices

1Other Areas include: the Virgin Islands,

American Samoa, Guam, and the Commonwealth of

the Northern Mariana Islands.

ENVIRONMENTAL PROTECTION

AGENCY

[FRL–5708–2]

Allotment of Drinking Water State

Revolving Fund Monies; Notice

AGENCY: Environmental Protection

Agency.

SUMMARY: The Environmental Protection

Agency (EPA) is announcing its

decision on allotment of Drinking Water

State Revolving Fund (DWSRF) monies

to States. For fiscal year 1997, funds

will be allotted based on the formula

used to distribute public water systems

supervision grants in fiscal year 1995.

For fiscal year 1998 and subsequent

fiscal years, funds will be allotted based

on each State’s proportional share of the

total eligible needs for the States,

derived from the Drinking Water

Infrastructure Needs Survey: First

Report to Congress. Each State will be

allotted at least one percent of the funds

available to the States.

Introduction

The DWSRF program was established

by the reauthorized Safe Drinking Water

Act (SDWA), signed by President

Clinton on August 6, 1996. The SDWA

authorizes $9.599 billion for the DWSRF

program through FY 2003. For FY 1997,

EPA’s budget includes $1.275 billion for

the DWSRF program. EPA’s Office of

Water is the national program manager

for the SDWA, including the DWSRF

program. As intended by Congress, the

DWSRF program will be implemented

largely by the States.

Fiscal Year 1997

Funds available for allotment to States

in FY 1997 will be allotted based on the

formula used to distribute public water

system supervision grant funds in FY

1995 (SDWA Section 1452(a)(1)(D)(i)).

In accordance with the law, each State,

including the District of Columbia, will

be allotted at least one percent of the

funds available for allotment to all the

States. The law also requires that the

Virgin Islands, the Commonwealth of

the Northern Mariana Islands, American

Samoa, and Guam together receive an

allotment not to exceed 0.33 percent of

the total funds available for allotment.

The formula results are shown below for

each State in dollar terms as well as in

percentages of the funds available to the

States. Allotment amounts are rounded

to the nearest one hundred dollars.

Under the law, the funds available for

allotment to the States are determined

by deducting national set-asides from

the total DWSRF appropriation. In fiscal

year 1997, this means that the one and

one half percent set-aside for Native

Americans, which totals $19,125,000, is

removed from the total appropriation to

calculate the level of funds available to

the States. In fiscal year 1997,

$1,255,875,000 is the level of funds

available to the States.

Fiscal Year 1997 DWSRF Final

Allotment Results

Alabama $12,558,800 (1.00%);

Alaska $ 27,039,000 (2.15%);

Arizona $16,938,300 (1.35%);

Arkansas $12,558,800 (1.00%);

California $75,682,600 (6.03%);

Colorado $16,784,100 (1.34%);

Connecticut $21,408,200 (1.70%);

Delaware $12,558,800 (1.00%);

District of Columbia $12,558,800

(1.00%);

Florida $45,132,600 (3.59%);

Georgia $25,775,000 (2.05%);

Hawaii $12,558,800 (1.00%);

Idaho $14,157,800 (1.13%);

Illinois $38,502,400 (3.07%);

Indiana $25,712,100 (2.05%);

Iowa $16,857,300 (1.34%);

Kansas $14,095,000 (1.12%);

Kentucky $12,558,800 (1.00%);

Louisiana $20,420,300 (1.63%);

Maine $12,653,200 (1.01%);

Maryland $17,640,900 (1.40%);

Massachusetts $14,344,600 (1.14%);

Michigan $59,681,100 (4.75%);

Minnesota $42,086,000 (3.35%);

Mississippi $16,474,200 (1.31%);

Missouri $21,857,600 (1.74%);

Montana $14,826,200 (1.18%);

Nebraska $12,824,000 (1.02%);

Nevada $12,558,800 (1.00%);

New Hampshire $13,754,800 (1.10%);

New Jersey $27,947,300 (2.23%);

New Mexico $12,759,800 (1.02%);

New York $59,167,700 (4.71%);

North Carolina $46,114,100 (3.67%);

North Dakota $12,558,800 (1.00%);

Ohio $43,073,000 (3.43%);

Oklahoma $17,561,900 (1.40%);

Oregon $18,920,500 (1.51%);

Pennsylvania $53,270,700 (4.24%);

Puerto Rico $12,558,800 (1.00%);

Rhode Island $12,558,800 (1.00%);

South Carolina $14,821,600 (1.18%);

South Dakota $12,558,800 (1.00%);

Tennessee $12,776,200 (1.02%);

Texas $70,153,800 (5.59%);

Utah $12,558,800 (1.00%);

Vermont $12,558,800 (1.00%);

Virginia $29,442,400 (2.34%);

Washington $31,145,900 (2.48%);

West Virginia $12,558,800 (1.00%);

Wisconsin $41,546,400 (3.31%);

Wyoming $12,558,800 (1.00%);

Other Areas 1 $4,144,400 (0.33%)

Fiscal Year 1998 and Subsequent Fiscal

Years

Under SDWA Section

1452(a)(1)(D)(ii), Congress has directed

that capitalization grants for FY 1998

and subsequent years be allotted among

States based on each State’s

proportional share of the State needs

identified in the most recent Drinking

Water Needs Survey, provided that each

State be allotted a minimum share of

one percent of the funds available for

allotment to all the States. The first

Drinking Water Needs Survey was

conducted over the last two years with

the cooperation of every State. The

results of the Survey were presented to

Congress on January 29, 1997.

Options Presented for Public Comment

On October 31, 1996, EPA solicited

public comment on six options for using

the results of the Drinking Water Needs

Survey to allocate DWSRF monies

among States (61 FR 56231). The

options presented in that Federal

Register notice are summarized below.

All of the options discussed below

assume that each State, and the District

of Columbia, will be allotted a

minimum share of one percent of the

funds available for allotment to all the

States, as required by law. All of the

options also assume, as required by law,

that the Virgin Islands, the

Commonwealth of the Northern Mariana

Islands, American Samoa, and Guam,

will together receive an allotment not to

exceed 0.33 percent of the funds

available for allotment to the States. The

funds available for allotment to the

States will be the level of funds

appropriated by Congress, less the

national set-asides, which include funds

reserved for Indian Tribes and Alaska

Native water systems. This framework

was specified by Congress in the 1996

amendments to the SDWA (Section

1452).

• Option 1 was a formula that would

allocate DWSRF monies to States based

on each State’s share of the total need.

Total need is the capital infrastructure

need faced by publicly and privately

owned community water systems

nationwide. Total need includes both

current and future needs for the 20-year

period from January 1995 through

December 2014. This option was the one

most favored by commenters, and was

selected by EPA, with some

modifications, as the basis for the

allotment formula. As discussed below,

total eligible need is the basis for

allocation of DWSRF monies.

• Option 2 was a formula based on

each State’s share of Current Need.

Current Need is identified as all

infrastructure improvement projects

needed now to protect public health.

• Option 3 was a formula based on

Current SDWA Need, which represents

capital improvement projects needed
Federal Register / Vol. 62, No. 52 / Tuesday, March 18, 1997 / Notices 12901

2The State of Alaska Department of

Environmental Conservation submitted two

separate responses.

now to ensure compliance with existing

SDWA regulations. Current SDWA Need

does not include distribution need tied

to the Total Coliform Rule (TCR).

• Option 4 was a formula based on

Total SDWA Need. This component of

need includes Current SDWA Need and

Future SDWA Need. Future SDWA need

includes projects needed over the next

20 years for compliance with existing

regulations, as well as for the proposed

Disinfectants and Disinfection

Byproducts and Enhanced Surface

Water Treatment Rules. Total SDWA

Need does not include distribution need

tied to the TCR.

EPA also solicited comments on

hybrid options that would take

advantage of the strengths of different

options and/or address concerns for

meeting the needs of small systems.

EPA presented two such options in its

request for comments:

• Option 5 was a hybrid of Current

Need and Current SDWA Need (e.g.,

50% of the formula based on a State’s

share of Current Need, with the other

50% based on Current SDWA Need).

Such an approach would combine the

benefits of formulas based on both types

of need. The Current SDWA Need

component would place emphasis on

the projects required now for

compliance with regulations, while the

Current Need component would take

into account all projects needed now—

including current distribution need

associated with the TCR.

• Option 6 was a hybrid formula

emphasizing the needs of small systems

(e.g., basing 50% on total need and 50%

on small system need). Giving added

weight to small system need would

acknowledge the special problems of

small systems. Small water systems

have both a higher per-household need

and more trouble in maintaining

compliance with drinking water

regulations than larger systems.

In addition to comments on these

hybrid options, EPA requested

suggestions for other hybrid options.

EPA also requested comment on the

percentages to employ in any hybrid.

EPA requested that commenters

suggesting alternative hybrids or other

options not included in the Federal

Register notice keep those options

within the scope of the law. The law

requires that funds be allotted to States

based on each State’s proportional share

of the State needs identified in the most

recent Drinking Water Needs Survey.

Summary of Comments

EPA received 23 responses to its

request for comments. These

commenters included the following:

• 12 State representatives.2

• 6 regional or city water agencies.

• 5 associations.

Almost three-fourths of the

commenters (15) favored Option 1, total

need, as their first choice. In addition,

6 commenters supported the total need

option as either their second choice, or

as the most significant factor in a hybrid

formula. Thus, 21 of the 23 commenters

supported use of total need in some

significant manner. The other options

that received support were: Option 2,

Current Need (1 commenter); Option 6,

Total or SDWA Need with an emphasis

on small systems need (5 commenters);

and two allotment formula options not

presented in the request for comments

(2 commenters). A summary of

comments appears below.

Comments Favoring Total Need

As stated above, the majority of

comments supported Option 1, total

need. Commenters from all but one

State favored this option, and all State

representatives participating in the

October 14, 1996, meeting of the

Association of State Drinking Water

Administrators favored this option.

Commenters in favor of total need

argued that this option is most

consistent with the intent of SDWA.

They noted that total need was the

bottom-line of the Drinking Water Needs

Survey. Section 1452(a)(1)(D) of the

SDWA requires that DWSRF monies for

fiscal year 1998 and following years be

allotted to States based on each State’s

proportional share of the State needs

identified in the most recent Drinking

Water Infrastructure Needs Survey.

These commenters interpreted this

provision to mean the bottom line total

need in the survey. Additionally,

statistical precision associated with total

need is the highest.

According to the commenters, this

approach appropriately provides States

with flexibility to determine which

needs are critical for protecting public

health, does not put States with the

most active SDWA compliance

programs at a disadvantage, includes

distribution system needs associated

with the TCR, and encourages proactive

health protection. In addition, these

commenters noted that many of the

projects identified as future needs when

the information was collected, are now

or will become current needs during the

lifetime of this formula.

EPA is persuaded by the arguments of

the commenters that supported Option

1, total need. The Agency feels that this

approach recognizes the differences in

need among States and gives the

maximum degree of flexibility. The

Agency will allot funds to each State

based on the State’s proportional share

of total eligible needs reported for the

most recent Drinking Water Needs

Survey conducted under SDWA Section

1452(h). Each State shall be allocated a

minimum of one percent of the funds

available to States, as required under

SDWA Section 1452(a)(1)(D)(ii). Once

funds have been allotted, States must

then choose projects for funding based

on the criteria in the law. The law

requires that State Intended Use Plans,

to the maximum extent practicable, give

priority for funding to projects that

address the most serious risk to human

health, are necessary to ensure

compliance with SDWA requirements

(including filtration), and assist systems

most in need on a per household basis,

according to State affordability criteria.

Total eligible need for the purpose of

the allotment formula will include most

but not all types of need under the

category of total need reported for the

Drinking Water Infrastructure Needs

Survey: First Report to Congress. Total

eligible need for the allotment formula

(or total eligible need) will not contain

projects that are ineligible for DWSRF

funding. Projects not eligible for funding

that are included in the Drinking Water

Infrastructure Needs Survey: First

Report to Congress are new and

improved dams and reservoirs. These

ineligible projects total just over three

percent of the total need identified in

the Drinking Water Infrastructure Needs

Survey: First Report to Congress.

Comments Favoring Current Need

One commenter provided an

argument against Option 1, total need,

stating that it would require public

water systems or States to project future

needs, which depend on a variety of

factors. For this reason, the commenter

advocated Option 2, Current Need.

However, EPA notes that the Drinking

Water Needs Survey included only welldocumented future needs that affect the

current population and are very likely to

be implemented. Furthermore, the

Agency notes that most future needs are

no more than five years away, because

systems generally plan only five years in

advance. Consequently, EPA believes

that basing the allotment formula upon

total needs will not result in an unfair

distribution of funds.

Comments Favoring Small System Need

In addition to the commenters that

favored total need and the one

commenter that favored Current Need,

five commenters favored a hybrid
12902 Federal Register / Vol. 62, No. 52 / Tuesday, March 18, 1997 / Notices

option that emphasizes small system

needs. Four commenters advocated a

hybrid of total need and total need for

small systems, and one commenter

advocated a hybrid of Total SDWA Need

and Total SDWA Need for small

systems.

One commenter supported a hybrid

option emphasizing small system needs

because the commenter felt that it

would be most beneficial to the

commenter’s State. Some commenters

believed that the Drinking Water Needs

Survey underestimated small system

need because many small systems do

not have the resources available to

document current and future needs.

Additionally, commenters argued that

this option was most consistent with the

SDWA’s intent to provide relief to small

systems and address the most serious

threats to public health.

EPA disagrees that small system

needs have been underestimated. The

approach for estimating small system

needs was developed by a workgroup

that included State representatives.

Under this approach, a statistically

significant sample of small systems

participated in the Drinking Water

Needs Survey. Because the workgroup

was aware that many small systems

would not have the capacity to

document their needs, the approach

called for site visits to all selected

systems. EPA staff and other water

system professionals, often

accompanied by State personnel,

interviewed small system operators,

examined all system components, and

developed documentation on site. If

project costs were not available, this

documentation, along with data

provided by States, engineering firms,

and other water systems, was used to

model small system costs. EPA believes

this methodology yielded a very

accurate estimate of need for small

systems.

It was not feasible to conduct a survey

of small systems that was statistically

significant on a State-by-State basis

because the Drinking Water Needs

Survey approach emphasized the

importance of accurately capturing

small system needs through site visits.

Therefore, the workgroup’s approach

called for a survey that was statistically

significant on a national basis. (For

medium and large systems, the survey

was statistically significant on a Stateby-State basis.) The national small

system need was distributed among

States based on the number of small

systems in each State, taking system size

and type (surface vs. ground) and

regional construction cost trends into

account. Since small system needs were

not based on State-by-State samples,

EPA concludes that it would not be

appropriate to assign a

disproportionately heavy weight to

small system needs in the allotment

formula.

Additionally, EPA notes that the

decision to utilize Option 1, total need,

does not diminish access by small

systems to DWSRF funding. The

formula allocates money to States,

which in turn determine how to

distribute the funds to systems. As

required under SDWA 1452(a)(2), States

must make available to small systems a

minimum of fifteen percent of DWSRF

funds, and it is within their purview to

distribute a greater percentage. There is

no reason to believe that weighting

small system needs in the allotment

formula would affect States’’ decisions

to provide DWSRF funding to small

systems. The Agency adds that the

reauthorized SDWA provides other

relief for small systems. The Act

includes provisions that allow States to

issue subsidized loans to

‘‘disadvantaged communities’’. Further,

it allows States to use two percent of

their allotments for technical assistance

to small systems serving 10,000 or fewer

people. In addition, the SDWA requires

that States make available a minimum of

15 percent of all dollars credited to a

DWSRF for loan assistance to small

systems that serve fewer than 10,000

persons.

Comments Suggesting Other Options

Two commenters advocated allotment

formula options not presented in the

October 31, 1996, Federal Register

notice requesting comments. One

commenter suggested a formula that

would take into account either the

number of individuals without piped

water or State populations. However,

EPA notes that SDWA Section

1452(a)(1)(D)(ii) requires that DWSRF

funding be allocated to States based on

a State’s proportional share of the State

needs identified in the most recent

Drinking Water Needs Survey of eligible

water systems. No provision is made in

the law to distribute DWSRF funds to

States based on the number of

individuals without piped water or on

population.

Another commenter suggested a

hybrid formula based 50 percent on

total need and 50 percent on Current

SDWA Need. While EPA recognizes that

current SDWA need emphasizes many

of the most serious threats to public

health, many commenters pointed out

that the category does not cover all

projects needed to protect public health.

There were no comments received in

favor of Options 3 or 4.

The commenters also addressed other,

related issues. Most significantly,

commenters requested that EPA

reevaluate the allotment formula after

the completion of the next Drinking

Water Needs Survey. The results of the

next Drinking Water Needs Survey are

due to Congress in February 2001

(SDWA Section 1452(h)). In late 2000,

EPA intends to again solicit comments

on the allotment formula for the

purpose of evaluating whether the

DWSRF allotment formula should be

modified.

Some commenters also questioned

whether comments on the allotment

formula should have been solicited

before the results of the Drinking Water

Infrastructure Needs Survey were made

available. The Agency believes that

seeking comments on the options for the

allotment formula before the survey

results were available invited

commenters to provide impartial

comments on which option best meets

the intent of the reauthorized SDWA.

EPA is confident that this approach

helped ensure that the chosen allotment

method was equitable and would meet

the intent of the SDWA.

EPA appreciates the participation of

all commenters in this process. To

reiterate, the Agency will use an

allotment formula that allocates to each

State a share of funding proportional to

the State’s total eligible need as

determined by the Drinking Water

Infrastructure Needs Survey: First

Report to Congress (SDWA Section

1452(a)(1)(D)). Each State, and the

District of Columbia, shall be allotted a

minimum of one percent of the funds

available for allotment to States (SDWA

Section 1452(a)(1)(D)(ii)). The Virgin

Islands, American Samoa, Guam, and

the Commonwealth of the Northern

Mariana Islands, will together receive an

allotment not to exceed 0.33 percent of

the funds available for allotment to the

States (SDWA Section 1452(j)). The

funds available for allotment to the

States will equal the level of funds

appropriated by Congress, less the

national set-asides.

The national set-asides for fiscal year

1998 include funds for Indian Tribes

and Alaska Native Village water systems

at the level of one and one half of one

percent of the total appropriation.

(SDWA Section 1452(i)). This comes to

$10,875,000 for Indian Tribes and

Alaska Native Villages in fiscal year

1998. Also, a national set-aside of

$2,000,000 is anticipated to be used for

monitoring for unregulated

contaminants. If funds are appropriated

for the DWSRF at the level of the

President’s budget of $725 million and

if the anticipated national set-asides do
Federal Register / Vol. 62, No. 52 / Tuesday, March 18, 1997 / Notices 12903

3Other Areas include: the Virgin Islands,

American Samoa, Guam, and the Commonwealth of

the Northern Mariana Islands.

not change, the total funds available to

the States would equal $712,125,000.

Each State’s allotment, based on these

assumptions, is shown below. Because

the percentages are based on the total

funds available for allotment to the

States, they can be used for planning

purposes for future years. Once the

appropriated amount and national setasides are known, a State’s allotment

can be estimated by subtracting the

national set-asides from the total funds

available for allotment and then

applying the appropriate percentage

shown below.

Fiscal Year 1998 DWSRF Allotment

Results (Based on the President’s

Budget of $725 Million and National

Set-Aside Assumptions)

Alabama $8,465,600 (1.19%);

Alaska $7,121,300 (1.00%);

Arizona $7,257,400 (1.02%);

Arkansas $10,132,200 (1.42%);

California $77,108,200 (10.83%);

Colorado $9,581,800 (1.35%);

Connecticut $7,121,300 (1.00%);

Delaware $7,121,300 (1.00%);

District of Columbia $7,121,300

(1.00%);

Florida $20,642,800 (2.90%);

Georgia $15,253,300 (2.14%);

Hawaii $7,121,300 (1.00%);

Idaho $7,121,300 (1.00%);

Illinois $ 24,753,200 (3.48%);

Indiana $8,687,500 (1.22%);

Iowa $11,238,700 (1.58%);

Kansas $10,008,100 (1.41%);

Kentucky $10,851,600 (1.52%);

Louisiana $9,949,200 (1.40%);

Maine $7,121,300 (1.00%);

Maryland $7,121,300 (1.00%);

Massachusetts $27,414,400 (3.85%);

Michigan $20,951,400 (2.94%);

Minnesota $11,856,100 (1.66%);

Mississippi $8,271,700 (1.16%);

Missouri $9,574,900 (1.34%);

Montana $7,121,300 (1.00%);

Nebraska $7,121,300 (1.00%);

Nevada $7,121,300 (1.00%);

New Hampshire $7,121,300 (1.00%);

New Jersey $17,347,900 (2.44%);

New Mexico $7,121,300 (1.00%);

New York $45,061,600 (6.33%);

North Carolina $12,859,400 (1.81%);

North Dakota $7,121,300 (1.00%);

Ohio $22,806,200 (3.20%);

Oklahoma $10,224,200 (1.44%);

Oregon $10,567,800 (1.48%);

Pennsylvania $22,404,800 (3.15%);

Puerto Rico $10,225,000 (1.44%);

Rhode Island $7,121,300 (1.00%);

South Carolina $7,669,400 (1.08%);

South Dakota $7,121,300 (1.00%);

Tennessee $9,557,400 (1.34%);

Texas $54,014,400 (7.58%);

Utah $7,121,300 (1.00%);

Vermont $7,121,300 (1.00%);

Virginia $13,895,300 (1.95%);

Washington $19,169,100 (2.69%);

West Virginia $7,121,300 (1.00%);

Wisconsin $9,548,400 (1.34%);

Wyoming $7,121,300 (1.00%);

Other Areas 3 $2,350,000 (0.33%)

Submission to Congress and the

General Accounting Office

Under 5 U.S.C. 801(a)(1)(A) as added

by the Small Business Regulatory

Enforcement Fairness Act of 1996, EPA

submitted a report containing this rule

and other required information to the

U.S. Senate, the U.S. House of

Representatives and the Comptroller

General of the General Accounting

Office prior to publication of the rule in

today’s Federal Register. This rule is

not a ‘‘major rule’’ as defined by 5

U.S.C. 804(2).

ADDRESSES: A copy of the public

comment received regarding this

allotment formula is available for review

at the EPA Drinking Water Docket, 401

M ST, SW, Washington, DC 20460. For

access to the docket materials, call (202)

260–3027 between 9:00 a.m. and 3:30

p.m. The allotment formula results for

fiscal year 1998 will be published in the

Federal Register once national set-aside

amounts have been finalized.

FOR FURTHER INFORMATION CONTACT: Mr.

Clive Davies (202) 260–1421.

Dated: March 12, 1997.

Robert Perciasepe,

Assistant Administrator for Water.

[FR Doc. 97–6827 Filed 3–17–97; 8:45 am]

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