I 

113TH CONGRESS 

2D SESSION H. R. 3862 

To amend the Federal Water Pollution Control Act to assist municipalities 

and regional sewer authorities that would experience a significant hardship raising the revenue necessary to finance projects and activities 

for the construction of wastewater treatment works, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 14, 2014 

Mr. LATTA (for himself and Mr. WALZ) 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 assist 

municipalities and regional sewer authorities that would 

experience a significant hardship raising the revenue necessary to finance projects and activities for the construction of wastewater treatment works, 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. 

4 This Act may be cited as the ‘‘Clean Water Afford5 ability Act of 2014’’. 


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1 SEC. 2. INTEGRATED PERMITTING PROCESS. 

2 (a) IN GENERAL.—Section 402(a) of the Federal 

3 Water Pollution Control Act (33 U.S.C. 1342(a)) is 

4 amended by adding at the end the following: 

5 ‘‘(6) INTEGRATED PERMITS.— 

6 ‘‘(A) DEFINITION OF PUBLICLY OWNED

7 PERMITTEE.—In this paragraph, the term ‘pub8 licly owned permittee’ means either— 

9 ‘‘(i) a treatment works (as defined in 

10 section 212) that is publicly owned; or 

11 ‘‘(ii) a municipal separate storm sewer 

12 system referred to in this section. 

13 ‘‘(B) PLANNING APPROACH.—The Admin14 istrator shall establish a comprehensive and in15 tegrated planning approach to the obligations 

16 under this section of a publicly owned per17 mittee— 

18 ‘‘(i) under which permit obligations 

19 may be implemented according to a sched20 ule that— 

21 ‘‘(I) accounts for the financial ca22 pability of the publicly owned per23 mittee; 

24 ‘‘(II) prioritizes permit obliga25 tions according to the most cost-effecVerDate Mar 15 2010 05:44 Jan 15, 2014 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3862.IH H3862

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1 tive and environmentally beneficial 

2 outcomes; 

3 ‘‘(III) accounts for the pre4 existing maintenance, operational, and 

5 regulatory obligations of the publicly 

6 owned permittee under this section; 

7 and 

8 ‘‘(IV) enables the publicly owned 

9 permittee to implement innovative ap10 proaches to meet those obligations; 

11 and 

12 ‘‘(ii) that accounts for changed cir13 cumstances in the obligations of the pub14 licly owned permittee, such as— 

15 ‘‘(I) new innovative treatment 

16 approaches; 

17 ‘‘(II) new regulatory require18 ments; and 

19 ‘‘(III) changes in financial capa20 bility.’’. 

21 (b) DURATION OF PERMITS.—Section 402(b)(1)(B) 

22 of the Federal Water Pollution Control Act (33 U.S.C. 

23 1342(b)(1)(B)) is amended by inserting before the semi24 colon at the end the following: ‘‘, except that a permit with 

25 a term of more than 5 years but not more than 25 years 


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1 may be approved if the permittee has an approved inte2 grated plan established under subsection (a)(6)’’. 

3 SEC. 3. UPDATING OF GUIDANCE. 

4 (a) DEFINITIONS.—In this section, the following defi5 nitions apply: 

6 (1) ADMINISTRATOR.—The term ‘‘Adminis7 trator’’ means the Administrator of the Environ8 mental Protection Agency. 

9 (2) AFFORDABILITY.—The term ‘‘affordability’’ 

10 means, with respect to payment of a utility bill, a 

11 measure of whether an individual customer or house12 hold can pay the bill without undue hardship or un13 reasonable sacrifice in the essential lifestyle or 

14 spending patterns of the individual or household, as 

15 determined by the Administrator. 

16 (3) FINANCIAL CAPABILITY.—The term ‘‘finan17 cial capability’’ means the financial capability of a 

18 community to make investments necessary to make 

19 water quality-related improvements, taking into con20 sideration the criteria described in subsection 

21 (b)(2)(A). 

22 (4) GUIDANCE.—The term ‘‘guidance’’ means 

23 the guidance published by the Administrator entitled 

24 ‘‘Combined Sewer Overflows—Guidance for Finan25 cial Capability Assessment and Schedule DevelopVerDate Mar 15 2010 05:44 Jan 15, 2014 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3862.IH H3862

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1 ment’’ and dated February 1997, as applicable to 

2 combined sewer overflows and sanitary sewer over3 flows. 

4 (b) UPDATING.— 

5 (1) IN GENERAL.—Not later than 1 year after 

6 the date of enactment of this Act, the Administrator 

7 shall update the guidance to ensure that the evalua8 tions by the Administrator of financial capability as9 sessment and schedule development meet the criteria 

10 described in paragraph (2). 

11 (2) CRITERIA.—The criteria described in this 

12 paragraph are that, under the updated guidance— 

13 (A) in assessing the financial capability of 

14 a community— 

15 (i) greater emphasis should be placed 

16 on local economic conditions; 

17 (ii) for regional systems, consideration 

18 should be given to the economic conditions 

19 of political jurisdictions and significant de20 mographic groups within each region; 

21 (iii) prescriptive formulas for use in 

22 calculating financial capability and thresh23 olds for expenditure should not be consid24 ered to be the only indicator of the finan25 cial capability of a community; 


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1 (iv) site-specific local conditions 

2 should be taken into consideration in ana3 lyzing financial capability; 

4 (v) a single measure of financial capa5 bility or affordability (such as median 

6 household income) should be viewed in the 

7 context of other economic measures, rather 

8 than as a threshold to be achieved; and 

9 (vi)(I) consideration should be given 

10 to the economic outlook of a community, 

11 including the potential impact of program 

12 requirements over time, in the development 

13 of implementation schedules; and 

14 (II) the assessment should take into 

15 consideration other essential community 

16 investments relating to water quality im17 provements; 

18 (B) with respect to the timing of imple19 mentation of water quality-related improve20 ments— 

21 (i) environmental improvement imple22 mentation schedules should be structured 

23 to mitigate the potential adverse impact on 

24 distressed populations resulting from the 

25 costs of the improvements; 


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1 (ii) implementation schedules should 

2 reflect local community financial conditions 

3 and economic impacts; 

4 (iii) implementation schedules should 

5 allow permittees up to 30 years to imple6 ment water quality-related improvements 

7 in appropriate cases in which the cost of 

8 implementing the improvements places a 

9 high financial burden on the permittee; 

10 and 

11 (iv) existing implementation schedules 

12 should be modified in appropriate cases 

13 taking into consideration the criteria set 

14 forth in this subparagraph; 

15 (C) with respect to implementation— 

16 (i) a determination of local financial 

17 capability may be achieved through an 

18 evaluation of an array of factors the rel19 ative importance of which may vary across 

20 regions and localities; and 

21 (ii) an appropriate methodology 

22 should give consideration to such various 

23 factors as are appropriate to recognize the 

24 prevailing and projected economic concerns 

25 in a community; and 


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1 (D) the residential indicator should be re2 vised to include— 

3 (i) a consideration of costs imposed 

4 upon ratepayers for essential utilities; 

5 (ii) increased consideration and quan6 tification of local community-imposed costs 

7 in regional systems; 

8 (iii) a mechanism to assess impacts on 

9 communities with disparate economic con10 ditions throughout the entire service area 

11 of a utility; 

12 (iv) a consideration of the industrial 

13 and population trends of a community; 

14 (v) recognition that— 

15 (I) the median household income 

16 of a service area reflects a numerical 

17 median rather than the distribution of 

18 incomes within the service area; and 

19 (II) more representative methods 

20 of determining affordability, such as 

21 shelter costs, essential utility pay22 ments, State affordability criteria, and 

23 State and local tax efforts, should be 

24 considered; 


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1 (vi) a consideration of low-income 

2 ratepayer percentages; and 

3 (vii) impacts relating to program de4 livery, such as water quality infrastructure 

5 market saturation and program manage6 ment. 

7 (3) IMPLEMENTATION.—The updated guidance 

8 should indicate that, in a case in which a previously 

9 approved long-term control plan or associated en10 forceable agreement does not prohibit modification 

11 of the plan or terms of the agreement (including fi12 nancial capability considerations), and all parties are 

13 in agreement that a change is needed or that the 

14 plan or agreement does not prohibit reopening to ad15 dress changes in the economic or financial status of 

16 the community since the effective date of the plan or 

17 agreement, reconsideration and modification of fi18 nancial capability determinations and implementa19 tion schedules based on the criteria described in 

20 paragraph (2) is appropriate. 

21 (4) APPLICABILITY.—The Administrator shall 

22 apply the updated guidance, including the criteria 

23 described in paragraph (2), to each determination 

24 and analysis of affordability, financial capability, or 

25 widespread and substantial economic impact related 


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1 to implementation of a program under the Federal 

2 Water Pollution Control Act (33 U.S.C. 1251 et 

3 seq.). 

4 (c) PUBLICATION AND SUBMISSION.—Upon comple5 tion of the updating of guidance under subsection (b), the 

6 Administrator shall publish in the Federal Register and 

7 submit to the Committee on Environment and Public 

8 Works of the Senate and the Committee on Transpor9 tation and Infrastructure of the House of Representatives 

10 the updated guidance. 

11 SEC. 4. CAPITALIZATION GRANT AGREEMENTS. 

12 Section 602(b) of the Federal Water Pollution Con13 trol Act (33 U.S.C. 1382(b)) is amended— 

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

15 (9); 

16 (2) by striking the period at the end of para17 graph (10) and inserting ‘‘; and’’; and 

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

19 ‘‘(11) the State will use at least 15 percent of 

20 the amount of each capitalization grant received by 

21 the State under this title after September 30, 2015, 

22 to provide assistance to municipalities of fewer than 

23 10,000 individuals that meet the affordability cri24 teria established by the State under section 

25 603(i)(2) for activities included on the State’s priVerDate Mar 15 2010 05:44 Jan 15, 2014 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3862.IH H3862

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1 ority list established under section 603(g), to the ex2 tent that there are sufficient applications for such 

3 assistance.’’. 

4 SEC. 5. WATER POLLUTION CONTROL REVOLVING LOAN 

5 FUNDS. 

6 (a) EXTENDED REPAYMENT PERIOD.—Section 

7 603(d)(1) of the Federal Water Pollution Control Act (33 

8 U.S.C. 1383(d)(1)) is amended— 

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

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

11 life of the project to be financed with the proceeds 

12 of the loan’’; and 

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

14 than 20 years after project completion’’ and insert15 ing ‘‘upon the expiration of the term of the loan’’. 

16 (b) ADDITIONAL SUBSIDIZATION.—Section 603 of 

17 such Act (33 U.S.C. 1383) is amended by adding at the 

18 end the following: 

19 ‘‘(i) ADDITIONAL SUBSIDIZATION.— 

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

21 State provides assistance to a municipality or inter22 municipal, interstate, or State agency under sub23 section (d), the State may provide additional sub24 sidization, including forgiveness of principal, negaVerDate Mar 15 2010 05:44 Jan 15, 2014 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3862.IH H3862

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1 tive interest loans, and grants to benefit a munici2 pality that— 

3 ‘‘(A) meets the State’s affordability criteria 

4 established under paragraph (2); or 

5 ‘‘(B) does not meet the State’s afford6 ability criteria if the recipient— 

7 ‘‘(i) seeks additional subsidization to 

8 benefit individual ratepayers in the resi9 dential user rate class; and 

10 ‘‘(ii) demonstrates to the State that 

11 such ratepayers will experience a signifi12 cant hardship from the increase in rates 

13 necessary to finance the project or activity 

14 for which assistance is sought. 

15 ‘‘(2) AFFORDABILITY CRITERIA.— 

16 ‘‘(A) ESTABLISHMENT.—On or before Sep17 tember 30, 2015, and after providing notice 

18 and an opportunity for public comment, a State 

19 shall establish affordability criteria to assist in 

20 identifying municipalities that would experience 

21 a significant hardship raising the revenue nec22 essary to finance a project or activity eligible 

23 for assistance under section 603(c)(1) if addi24 tional subsidization is not provided. Such cri25 teria shall be based on income data, population 


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1 trends, and other data determined relevant by 

2 the State, including whether the project or ac3 tivity is to be carried out in an economically 

4 distressed area, as described in section 301 of 

5 the Public Works and Economic Development 

6 Act of 1965 (42 U.S.C. 3161). 

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

8 previously established, after providing notice 

9 and an opportunity for public comment, afford10 ability criteria that meet the requirements of 

11 subparagraph (A), the State may use the cri12 teria for the purposes of this subsection. For 

13 purposes of this Act, any such criteria shall be 

14 treated as affordability criteria established 

15 under this paragraph. 

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

17 The Administrator may publish information to 

18 assist States in establishing affordability cri19 teria under subparagraph (A). 

20 ‘‘(3) USE OF CAPITALIZATION GRANTS.—A 

21 State shall use not less than 20 percent but not 

22 more than 30 percent of the amount of the capital23 ization grants received by the State under this title 

24 in fiscal years beginning after September 30, 2015, 


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1 to provide additional subsidization to eligible recipi2 ents under paragraph (1).’’. 

Æ 


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