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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3202 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 3202

   To establish a Water Protection and Reinvestment Fund to support 
 investments in clean water and drinking water infrastructure, and for 
                            other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             July 14, 2009

 Mr. Blumenauer (for himself, Mr. LaTourette, Mr. Simpson, Mr. Dicks, 
and Mr. Petri) introduced the following bill; which was referred to the 
Committee on Transportation and Infrastructure, and in addition to the 
  Committees on Energy and Commerce, Ways and Means, and Science and 
Technology, for a period to be subsequently determined by the Speaker, 
 in each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL

 
   To establish a Water Protection and Reinvestment Fund to support 
 investments in clean water and drinking water infrastructure, and for 
                            other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Water Protection 
and Reinvestment Act of 2009''.
    (b) Table of Contents.--

Sec. 1. Short title; table of contents.
                            TITLE I--REVENUE

Sec. 101. Establishment and funding of Water Protection and 
                            Reinvestment Trust Fund.
Sec. 102. Allocation of funds.
        TITLE II--STATE WATER POLLUTION CONTROL REVOLVING FUNDS

Sec. 201. Amendment of Federal Water Pollution Control Act.
Sec. 202. Technical assistance.
Sec. 203. General authority for capitalization grants.
Sec. 204. Capitalization grant agreements.
Sec. 205. Water pollution control revolving loan funds.
Sec. 206. High priority project grants and principal forgiveness.
               TITLE III--SAFE DRINKING WATER ACT FUNDING

Sec. 301. Use of State revolving loan funds.
Sec. 302. Priority system requirements.
Sec. 303. Affordability.
Sec. 304. Needs survey.
Sec. 305. Negotiation of contracts.
Sec. 306. Drinking water technical assistance for communities.
                  TITLE IV--ADDITIONAL GRANT PROGRAMS

Sec. 401. Definitions.
Sec. 402. Treatment works and community water system security grants.
Sec. 403. Climate Change Mitigation and Adaptation Grants.
Sec. 404. Workforce Development Grants.
Sec. 405. Sewer overflow control grants.
Sec. 406. Research, Development, and Technology Demonstration Program.
Sec. 407. Regional water research centers.
Sec. 408. Cost of service study.
Sec. 409. Drug take-back grants.
Sec. 410. State revolving fund review process.

                            TITLE I--REVENUE

SEC. 101. ESTABLISHMENT AND FUNDING OF WATER PROTECTION AND 
              REINVESTMENT TRUST FUND.

    (a) Water Protection and Reinvestment Trust Fund.--
            (1) In general.--Subchapter A of chapter 98 of the Internal 
        Revenue Code of 1986 (relating to establishment of trust funds) 
        is amended by adding at the end the following new section:

``SEC. 9511. WATER PROTECTION AND REINVESTMENT TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Water Protection 
and Reinvestment Trust Fund', consisting of such amounts as may be 
appropriated or credited to such fund as provided in this section or 
section 9602(b).
    ``(b) Transfers to Trust Fund.--There are hereby appropriated to 
the Water Protection and Reinvestment Trust Fund amounts equivalent to 
the taxes received in the Treasury before January 1, 2016, under the 
following provisions--
            ``(1) section 59B (relating to clean water restoration 
        tax), and
            ``(2) section 4171 (relating to taxes relating to water).
    ``(c) Expenditures.--Amounts in the Water Protection and 
Reinvestment Trust Fund shall be available, as provided in 
appropriation Acts, only for purposes of investments in clean water and 
drinking water infrastructure in accordance with the Water Protection 
and Reinvestment Act of 2009.''.
            (2) Clerical amendment.--The table of sections for 
        subchapter A of chapter 98 of such Code is amended by adding at 
        the end the following new item:

``Sec. 9511. Water Protection and Reinvestment Trust Fund.''.
    (b) Excise Taxes Funding Water Protection and Reinvestment Trust 
Fund.--
            (1) In general.--Chapter 32 of such Code is amended by 
        inserting after subchapter D the following new subchapter:

                ``Subchapter E--Taxes Relating to Water

``Sec. 4171. Imposition of tax.
``Sec. 4172. Definitions and special rule.

``SEC. 4171. IMPOSITION OF TAX.

    ``(a) Water-based Beverage.--There is hereby imposed on the sale of 
any container of water-based beverage by the manufacturer, producer, or 
importer thereof a tax equal to 4 cents per container of such beverage 
which is 5 gallons or less. For purposes of the preceding sentence, the 
manufacturer or producer is the entity that puts the beverage into the 
container subject to the tax under such sentence.
    ``(b) Water Disposal Product.--There is hereby imposed on the sale 
of any water disposal product by the manufacturer, producer, or 
importer thereof a tax equal to 3 percent of the price for which so 
sold.
    ``(c) Pharmaceutical Tax.--There is hereby imposed on the sale of 
any pharmaceutical product by the manufacturer, producer, or importer 
thereof a tax equal to 0.5 percent of the price for which so sold.
    ``(d) Termination.--The taxes imposed by this section shall not 
apply to any production, manufacture, or importation after December 31, 
2015.

``SEC. 4172. DEFINITIONS AND SPECIAL RULE.

    ``(a) Water-based Beverage.--For purposes of this subchapter--
            ``(1) Water-based beverage.--The term `water-based 
        beverage' means any beverage which is--
                    ``(A) water, or
                    ``(B) created by mixing water with other liquids, 
                flavorings, vitamins, or other ingredients where the 
                resulting product is at least 50 percent water by 
                weight.
            ``(2) Exceptions.--The term `water-based beverage' does not 
        include--
                    ``(A) any pharmaceutical product,
                    ``(B) any alcoholic beverage, and
                    ``(C) any product where--
                            ``(i) at least 75 percent of the water that 
                        naturally existed in the product is removed,
                            ``(ii) the resulting concentrated product 
                        is shipped and then the water replaced, and
                            ``(iii) the beverage is then packaged for 
                        sale.
            ``(3) Container.--The term `container' means any can, glass 
        bottle, plastic bottle, aseptic container, or other sealed 
        package for transportation and sale.
    ``(b) Water Disposal Product.--For purposes of this subchapter--
            ``(1) In general.--The term `water disposal product' means 
        any of the following: soaps and detergents, toiletries, toilet 
        tissue, water softeners, and cooking oils.
            ``(2) Soaps and detergents.--The term `soaps and 
        detergents' means--
                    ``(A) soaps and other detergents, such as laundry 
                detergents and dishwashing detergents,
                    ``(B) toothpaste gels, and
                    ``(C) tooth powders,
        as determined under regulations prescribed by the Secretary.
            ``(3) Toiletries.--The term `toiletries' means toilet 
        preparations such as perfumes, shaving preparations, hair 
        preparations, face creams, lotions (including sunscreens), and 
        other cosmetic preparations, as determined under regulations 
        prescribed by the Secretary.
            ``(4) Toilet tissue.--The term `toilet tissue' means toilet 
        tissue, as determined under regulations prescribed by the 
        Secretary.
            ``(5) Water softeners.--The term `water softeners' means 
        farm, household, commercial, and industrial water softeners, as 
        determined under regulations prescribed by the Secretary.
            ``(6) Cooking oils.--
                    ``(A) In general.--The term `cooking oils' means 
                corn oils, soy oils, and other vegetable oils, as 
                determined under regulations prescribed by the 
                Secretary.
                    ``(B) Exception.--The term `cooking oils' does not 
                mean a product that the Secretary determines, by 
                regulation, is not typically disposed of, by consumers, 
                directly in wastewater.
    ``(c) Pharmaceutical Product.--The term `pharmaceutical product' 
means--
            ``(1) a drug (as defined in section 201 of the Federal 
        Food, Drug, and Cosmetic Act (21 U.S.C. 321)), and
            ``(2) a biological product (as defined in section 351 of 
        the Public Health Service Act (42 U.S.C. 261)).
    ``(d) Use Treated as Sale.--For purposes of this subchapter, if any 
person manufactures, produces, or imports any item on which tax is 
imposed under this subchapter, and uses such item, then such person 
shall be liable for tax under this subchapter in the same manner as if 
such item were sold by such person.''.
            (2) Conforming amendment.--The table of subchapters for 
        chapter 32 of such Code is amended by inserting after the item 
        relating to subchapter D the following new item:

               ``subchapter e. taxes relating to water''.

    (c) Corporate Income Tax Funding Water Protection and Reinvestment 
Trust Fund.--
            (1) In general.--Subchapter A of chapter 1 of the Internal 
        Revenue Code of 1986 is amended by inserting at the end the 
        following new part:

                ``PART VIII--CLEAN WATER RESTORATION TAX

``SEC. 59B. CLEAN WATER RESTORATION TAX.

    ``(a) Imposition of Tax.--In the case of a corporation, there is 
hereby imposed (in addition to any other tax imposed by this subtitle) 
a tax equal to 0.15 percent of the excess of--
            ``(1) the modified alternative minimum taxable income of 
        such corporation for the taxable year, over
            ``(2) $4,000,000.
    ``(b)  Modified Alternative Minimum Taxable Income.--For purposes 
of this section, the term `modified alternative minimum taxable income' 
has the meaning given such term by section 59A(b).
    ``(c) Applicable Rules.--For purposes of this section, rules 
similar to the rules of subsections (c) and (d) of section 59A shall 
apply.
    ``(d) Application of Tax.--Subsection (a) shall not apply to a 
taxable year beginning after December 31, 2015.''.
            (2) Conforming amendments.--
                    (A) Section 26(b)(2) of such Code is amended by 
                striking ``and'' at the end of subparagraph (W), by 
                striking the period at the end of subparagraph (X) and 
                inserting ``, and'', and by inserting after 
                subparagraph (Y) the following new subparagraph:
                    ``(Y) section 59B (relating to clean water 
                restoration tax).''.
                    (B) Section 164(a) of such Code is amended by 
                inserting after paragraph (5) the following new 
                paragraph:
            ``(6) The clean water restoration tax imposed by section 
        59B.''.
                    (C) Section 275(a)(6) of such Code is amended by 
                inserting ``or 59B'' after ``section 59A''.
                    (D) Section 882(a)(1) of such Code is amended by 
                inserting ``59B,'' after ``59A,''.
                    (E) Section 1561(a) of such Code is amended by 
                striking ``and'' at the end of paragraph (3), by 
                striking the period at the end of paragraph (4) and 
                inserting ``, and'', and by inserting after paragraph 
                (4) the following new subparagraph:
            ``(5) one $4,000,000 amount for purposes of computing the 
        tax imposed by section 59B.''.
                    (F) Section 6425(g)(1)(A) of such Code is amended 
                by striking ``plus'' at the end of clause (iii), by 
                striking ``over'' at the end of clause (iv) and 
                inserting ``plus'', and by inserting after clause (iv) 
                the following new clause:
                            ``(iv) the tax imposed by section 59B, 
                        over''.
                    (G) Section 6655(c)(1)(A) of such Code is amended 
                by striking ``plus'' at the end of clause (ii), by 
                striking ``over'' at the end of clause (iii) and 
                inserting ``plus'', and by inserting after clause (iii) 
                the following new clause:
                            ``(iv) the tax imposed by section 59B, 
                        over''.
    (d) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to taxable years 
        beginning after the date of the enactment of this Act.
            (2) Excise tax.--The amendments made by subsection (b) 
        shall apply to sales on or after the first calendar quarter 
        beginning after 1 year after the date of the enactment of this 
        Act.

SEC. 102. ALLOCATION OF FUNDS.

    (a) In General.--The Administrator of the Environmental Protection 
Agency shall allocate the amount of funds appropriated out of the Water 
Protection and Reinvestment Fund established by section 9511 of the 
Internal Revenue Code of 1986 for a fiscal year among programs and 
activities as follows:
            (1) Clean water programs.--Of such amount, the 
        Administrator shall make available--
                    (A) 48 percent for making capitalization grants 
                under section 601 of the Federal Water Pollution 
                Control Act (33 U.S.C. 1381; relating to capitalization 
                grants for State water pollution control revolving 
                funds);
                    (B) 1.5 percent for making grants under section 106 
                of such Act (33 U.S.C. 1256; relating to grants for 
                pollution control programs);
                    (C) 2.5 percent for making grants under section 319 
                of such Act (33 U.S.C. 1329; relating to nonpoint 
                source management programs); and
                    (D) 0.5 percent for making grants under section 
                104(b)(8) of such Act (as added by section 202 of this 
                Act; relating to technical assistance to rural and 
                small municipalities and tribal governments).
            (2) Safe drinking water funding.--Of such amount, the 
        Administrator shall make available--
                    (A) 35 percent for making capitalization grants 
                under section 1452 of the Safe Drinking Water Act (42 
                U.S.C. 300j-12; relating to capitalization grants for 
                State drinking water treatment revolving loan funds); 
                and
                    (B) 0.5 percent for providing technical assistance 
                under section 1442(e) of the Safe Drinking Water Act 
                (42 U.S.C. 300j-1(e); relating to technical assistance 
                for small public water systems).
            (3) Additional grant programs.--Of such total amount, the 
        Administrator shall make available--
                    (A) 0.5 percent for making grants under section 402 
                (relating to treatment works and community systems 
                security);
                    (B) 1 percent for making grants under section 403 
                (relating to climate change and adaptation grants);
                    (C) 0.05 percent for making grants under section 
                109 of the Federal Water Pollution Control Act (33 
                U.S.C. 1259) in accordance with section 404(a) 
                (relating to training grants and contracts);
                    (D) 0.05 percent for awarding scholarships under 
                section 111 of the Federal Water Pollution Control Act 
                (33 U.S.C. 1261) in accordance with section 404(c) 
                (relating to scholarships for the studies on the 
                operation and maintenance of treatment works);
                    (E) 0.1 percent for establishing training programs 
                and making grants under section 1442(c) of the Safe 
                Drinking Water Act (42 U.S.C. 300j-1(c)) in accordance 
                with section 404(d) (relating to training for personnel 
                who manage or operate public water systems);
                    (F) 5 percent for making grants under section 221 
                of the Federal Water Pollution Control Act (33 U.S.C. 
                1301; relating to sewer overflow control grants);
                    (G) 5 percent for carrying out sections 406, 407, 
                and 408 (relating to the national water infrastructure 
                research, development, and demonstration program, 
                regional water research centers, and a cost of service 
                study); and
                    (H) 0.3 percent for making grants under section 
                410(a) (relating to drug take back grants).
    (b) Treatment of Funds.--The funds made available for a program or 
activity under this section, shall be in addition to any funds made 
available for the program or activity under any other provision of law.

        TITLE II--STATE WATER POLLUTION CONTROL REVOLVING FUNDS

SEC. 201. AMENDMENT OF FEDERAL WATER POLLUTION CONTROL ACT.

    Except as otherwise expressly provided, whenever in this title an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be considered to 
be made to a section or other provision of the Federal Water Pollution 
Control Act (33 U.S.C. 1251 et seq.).

SEC. 202. TECHNICAL ASSISTANCE.

    Section 104(b) (33 U.S.C. 1254(b)) is amended--
            (1) by striking ``and'' at the end of paragraph (6);
            (2) by striking the period at the end of paragraph (7) and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(8) make grants to nonprofit organizations--
                    ``(A) to provide technical assistance to rural and 
                small municipalities and tribal governments for the 
                purpose of assisting, in consultation with the State in 
                which the assistance is provided, such municipalities 
                and tribal governments in the planning, developing, and 
                acquisition of financing for eligible projects 
                described in section 603(c);
                    ``(B) to provide technical assistance and training 
                for rural, small, and tribal publicly owned treatment 
                works and decentralized wastewater treatment systems to 
                enable such treatment works and systems to protect 
                water quality and achieve and maintain compliance with 
                the requirements of this Act; and
                    ``(C) to disseminate information to rural, small, 
                and tribal municipalities and municipalities that meet 
                the affordability criteria established under section 
                603(i)(2) by the State in which the municipality is 
                located with respect to planning, design, construction, 
                and operation of publicly owned treatment works and 
                decentralized wastewater treatment systems.''.

SEC. 203. GENERAL AUTHORITY FOR CAPITALIZATION GRANTS.

    Section 601(a) (33 U.S.C. 1381(a)) is amended by striking ``for 
providing assistance'' and all that follows through the period at the 
end and inserting the following: ``to accomplish the objectives, goals, 
and policies of this Act by providing assistance for projects and 
activities identified in section 603(c).''.

SEC. 204. CAPITALIZATION GRANT AGREEMENTS.

    (a) Specific Requirements.--Section 602(b) (33 U.S.C. 1382(b)) is 
amended--
            (1) by striking ``and'' at the end of paragraph (9);
            (2) by striking the period at the end of paragraph (10) and 
        inserting a semicolon; and
            (3) by adding at the end the following:
            ``(11) the State will require that each contract and 
        subcontract for program management, construction management, 
        planning studies, feasibility studies, architectural services, 
        preliminary engineering, design, engineering, surveying, 
        mapping, and related services entered into using amounts from 
        the fund will be awarded in the same way that a contract for 
        architectural and engineering services is awarded under chapter 
        11 of title 40, United States Code, except that such an award 
        shall not be construed as conferring a proprietary interest 
        upon the United States;
            ``(12) the State will not provide financial assistance 
        using amounts from the fund for any project that will provide 
        substantial direct benefits to new communities, lots, or 
        subdivisions, other than a project to construct an advanced 
        decentralized wastewater system;
            ``(13) the requirements of section 513 will apply to the 
        construction of treatment works carried out in whole or in part 
        with assistance made available by a State water pollution 
        control revolving fund as authorized under this title, or with 
        assistance made available under section 205(m), or both, in the 
        same manner as treatment works for which grants are made under 
        this Act; and
            ``(14) the State will allocate funds for high priority 
        projects in accordance with section 607.''.
    (b) Advanced Decentralized Wastewater System Defined.--Section 502 
is amended by adding at the end the following:
            ``(25) Advanced decentralized wastewater system.--The term 
        `advanced decentralized wastewater system' means a system for 
        treating domestic sewage that is located at or near a site at 
        which the sewage is generated, provides more effective 
        treatment than a conventional septic system, and includes a 
        plan and funding mechanism for long-term maintenance.''.

SEC. 205. WATER POLLUTION CONTROL REVOLVING LOAN FUNDS.

    (a) Projects and Activities Eligible for Assistance.--Section 
603(c) (33 U.S.C. 1383(c)) is amended to read as follows:
    ``(c) Projects and Activities Eligible for Assistance.--The amounts 
of funds available to each State water pollution control revolving fund 
shall be used only for providing financial assistance--
            ``(1) to any municipality or intermunicipal, interstate, or 
        State agency for construction of publicly owned treatment works 
        to address the needs of existing communities;
            ``(2) for implementation of measures to increase the 
        security of publicly owned treatment works, including 
        vulnerability assessment updates and safer alternatives for 
        treatment chemicals;
            ``(3) for implementation of a nonpoint management program 
        established under section 319;
            ``(4) for development and implementation of a conservation 
        and management plan for an estuary under section 320;
            ``(5) for implementation of measures to manage, reduce, 
        treat, capture, or reuse municipal storm water, agricultural 
        storm water, and return flows from irrigated agriculture;
            ``(6) for repair or replacement of decentralized wastewater 
        treatment systems that treat domestic sewage;
            ``(7) to any municipality or intermunicipal, interstate, or 
        State agency for implementation of measures to reduce the 
        demand for publicly owned treatment works capacity through 
        water conservation, efficiency, or reuse;
            ``(8) for implementation of measures to integrate water 
        resource management planning and implementation;
            ``(9) to any municipality or intermunicipal, interstate, or 
        State agency for measures to reduce the energy consumption 
        needs for publically owned treatment works, including the 
        implementation of energy efficient or renewable generation 
        technologies;
            ``(10) for projects to correct failing residential septic 
        systems or cesspools; and
            ``(11) for implementation of technologies, management 
        programs, or other measures--
                    ``(A) to improve monitoring for and to alert the 
                owner or operator of a publicly owned treatment works 
                of the occurrence of a spill, overflow, or other 
                discharge or release; and
                    ``(B) to provide for public notification of a 
                spill, overflow, or other discharge or release of 
                pollution into waters of the United States or from 
                point sources into areas in which there is a potential 
                risk of public exposure.''.
    (b) Extended Repayment Period.--Section 603(d)(1) (33 U.S.C. 
1383(d)(1)) is amended--
            (1) in subparagraph (A) by striking ``20 years'' and 
        inserting ``the lesser of 30 years or the design life of the 
        project to be financed with the proceeds of the loan''; and
            (2) in subparagraph (B) by striking ``not later than 20 
        years after project completion'' and inserting ``upon the 
        expiration of the term of the loan''.
    (c) Fiscal Sustainability Plan.--Section 603(d)(1) (33 U.S.C. 
1383(d)(1)) is further amended--
            (1) by striking ``and'' at the end of subparagraph (C);
            (2) by inserting ``and'' at the end of subparagraph (D); 
        and
            (3) by adding at the end the following:
                    ``(E) for any portion of a treatment works proposed 
                for repair, replacement, or expansion, and eligible for 
                assistance under section 603(c)(1), the recipient of 
                such assistance will develop and implement a fiscal 
                sustainability plan that includes--
                            ``(i) an inventory of critical assets that 
                        are a part of that portion of the treatment 
                        works;
                            ``(ii) an evaluation of the condition and 
                        performance of inventoried assets or asset 
                        groupings;
                            ``(iii) a plan for maintaining, repairing, 
                        and, as necessary, replacing that portion of 
                        the treatment works and a plan for funding such 
                        activities; and
                            ``(iv) a certification that the recipient 
                        has evaluated and will be implementing water 
                        and energy conservation efforts as part of the 
                        plan;''.
    (d) Expenses of Administering State Funds.--Section 603(d)(7) (33 
U.S.C. 1383(d)(7)) is amended by inserting before the period at the end 
the following: ``or $400,000 per year, or \1/5\ percent per year of the 
current valuation of the fund, whichever amount is greatest, plus the 
amount of any fees collected by the State for such purpose regardless 
of the source''.
    (e) Additional Subsidization.--Section 603 (33 U.S.C. 1383) is 
amended by adding at the end the following:
    ``(i) Additional Subsidization.--
            ``(1) In general.--In any case in which a State provides 
        assistance to a municipality or intermunicipal, interstate, or 
        State agency under subsection (d), the State may provide 
        additional subsidization, including forgiveness of principal 
        and negative interest loans--
                    ``(A) to benefit a municipality that--
                            ``(i) meets the State's affordability 
                        criteria established under paragraph (2); or
                            ``(ii) does not meet the State's 
                        affordability criteria if the recipient--
                                    ``(I) seeks additional 
                                subsidization to benefit individual 
                                ratepayers in the residential user rate 
                                class;
                                    ``(II) demonstrates to the State 
                                that such ratepayers will experience a 
                                significant hardship from the increase 
                                in rates necessary to finance the 
                                project or activity for which 
                                assistance is sought; and
                                    ``(III) ensures, as part of an 
                                assistance agreement between the State 
                                and the recipient, that the additional 
                                subsidization provided under this 
                                paragraph is directed through a user 
                                charge rate system (or other 
                                appropriate method) to such ratepayers; 
                                or
                    ``(B) to implement an innovative or alternative 
                process, material, technique, or technology (including 
                low-impact technologies, nonstructural protection of 
                surface waters, a new or improved method of waste 
                treatment, and nutrient pollutant trading) that may 
                result in greater environmental benefits, or equivalent 
                environmental benefits at reduced cost, when compared 
                to a standard process, material, technique, or 
                technology.
            ``(2) Affordability criteria.--
                    ``(A) Establishment.--On or before September 30, 
                2010, and after providing notice and an opportunity for 
                public comment, a State shall establish affordability 
                criteria to assist in identifying municipalities that 
                would experience a significant hardship raising the 
                revenue necessary to finance a project or activity 
                eligible for assistance under section 603(c)(1) if 
                additional subsidization is not provided. Such criteria 
                shall be based on income data, population trends, and 
                other data determined relevant by the State.
                    ``(B) Existing criteria.--If a State has previously 
                established, after providing notice and an opportunity 
                for public comment, affordability criteria that meet 
                the requirements of subparagraph (A), the State may use 
                the criteria for the purposes of this subsection. For 
                purposes of this Act, any such criteria shall be 
                treated as affordability criteria established under 
                this paragraph.
            ``(3) Priority.--A State may give priority to a recipient 
        for a project or activity eligible for funding under section 
        603(c)(1) if the recipient meets the State's affordability 
        criteria.
            ``(4) Limitation.--The total amount of additional 
        subsidization provided under this subsection by a State may not 
        exceed 30 percent of the total amount of capitalization grants 
        (less the amounts required to be allocated in accordance with 
        section 607) received by the State under this title in fiscal 
        years beginning after September 30, 2009.''.
    (f) Prioritization.--Section 603(g) (33 U.S.C. 1383(g)) is amended 
to read as follows:
    ``(g) Priority System Requirement.--
            ``(1) Definitions.--In this subsection, the following 
        definitions apply:
                    ``(A) Restructuring.--The term `restructuring' 
                means--
                            ``(i) the consolidation of management 
                        functions or ownership with another facility; 
                        or
                            ``(ii) the formation of cooperative 
                        partnerships.
                    ``(B) Traditional wastewater approach.--The term 
                `traditional wastewater approach' means a managed 
                system used to collect and treat wastewater from an 
                entire service area consisting of--
                            ``(i) collection sewers;
                            ``(ii) a centralized treatment plant using 
                        biological, physical, or chemical treatment 
                        processes; and
                            ``(iii) a direct point source discharge to 
                        surface water.
            ``(2) Priority system.--In providing financial assistance 
        from the water pollution control revolving fund of the State, 
        the State shall establish a priority system that--
                    ``(A) takes into consideration appropriate 
                chemical, physical, and biological data relating to 
                water quality that the State considers reasonably 
                available and of sufficient quality;
                    ``(B) ensures that projects undertaken with 
                assistance under this title are designed to achieve, as 
                determined by the State, the optimum water quality 
                management, consistent with the public health and water 
                quality goals and requirements of this Act;
                    ``(C) provides for public notice and opportunity to 
                comment on the establishment of the priority system and 
                the summary under subparagraph (D); and
                    ``(D) provides for the publication, not less than 
                biennially in summary form, of a description of 
                projects in the State that are eligible for assistance 
                under this title that indicates--
                            ``(i) the priority assigned to each project 
                        under the priority system of the State; and
                            ``(ii) the funding schedule for each 
                        project, to the extent the information is 
                        available.
            ``(3) Weight given to applications.--After determining 
        project priorities under paragraph (2), a State shall give 
        greater weight to an application for assistance if the 
        application contains such information as the State determines 
        to be necessary and includes--
                    ``(A) approaches other than a traditional 
                wastewater approach that treat or minimize sewage or 
                urban storm water discharges using--
                            ``(i) decentralized or distributed storm 
                        water controls;
                            ``(ii) decentralized wastewater treatment;
                            ``(iii) low-impact development technologies 
                        and nonstructural approaches;
                            ``(iv) stream buffers;
                            ``(v) wetland restoration and enhancement;
                            ``(vi) actions to minimize the quantity of 
                        and direct connections to impervious surfaces;
                            ``(vii) soil and vegetation, or other 
                        permeable materials; or
                            ``(viii) actions that increase efficient 
                        water use, water conservation, or water reuse;
                    ``(B) a demonstration of consistency with State, 
                regional, and municipal watershed plans, water 
                conservation and efficiency plans, or integrated water 
                resource management plans;
                    ``(C) a proposal by the applicant demonstrating 
                flexibility through alternative means to carry out 
                responsibilities under Federal regulations, which may 
                include watershed permitting and other innovative 
                management approaches, while achieving results that the 
                Administrator determines are measurably superior when 
                compared to regulatory standards; or
                    ``(D) a proposal by the applicant providing for the 
                implementation of effective utility management 
                principles, as identified in the 2007 Agreement between 
                the Environmental Protection Agency and major water and 
                wastewater associations.''.

SEC. 206. HIGH PRIORITY PROJECT GRANTS AND PRINCIPAL FORGIVENESS.

    (a) In General.--Title VI (33 U.S.C. 1381 et seq.) is amended--
            (1) by redesignating section 607 as section 608; and
            (2) by inserting after section 606 the following:

``SEC. 607. HIGH PRIORITY PROJECT GRANTS AND PRINCIPAL FORGIVENESS.

    ``(a) In General.--A State shall allocate for providing assistance 
for high priority projects in accordance with the requirements of this 
section--
            ``(1) 50 percent of the total amount of capitalization 
        grants received by the State in a fiscal year under section 601 
        that is attributable to funds appropriated out of the Water 
        Protection and Reinvestment Trust Fund; and
            ``(2) 50 percent of the State contributions made under 
        section 602(b)(2) in connection with that total amount.
    ``(b) Authority To Make Grants and Forgive Principal.--
Notwithstanding the requirements of section 603(d), assistance provided 
by a State for high priority projects under subsection (a) shall be in 
the form of a grant or a loan under which the State forgives repayment 
of 100 percent of the principal amount of the loan.
    ``(c) Identification of High Priority Projects.--
            ``(1) In general.--A State shall provide assistance under 
        this section in a manner that is consistent with the priority 
        lists established under sections 216 and 603.
            ``(2) Priority.--In providing assistance under this 
        section, a State shall give greater weight to projects that 
        address the most serious water pollution problems and--
                    ``(A) benefit communities with the greatest need 
                (determined on the basis of affordability criteria to 
                be established by the State); or
                    ``(B) incorporate nonstructural or decentralized 
                treatment practices.
    ``(d) Matching Funds.--The amount of a grant or loan for a project 
under this section shall be 50 percent of the project cost. The 
remaining project cost shall be provided by the State from sources 
other than capitalization grants under section 601.
    ``(e) Applicability.--Subsection (a) shall apply with respect to 
each fiscal year beginning after the date of enactment of this 
section.''.
    (b) Eligibility of Indian Tribes.--Section 518(e) (33 U.S.C. 
1377(e)) is amended by striking ``and 406'' and inserting ``406, and 
607''.

               TITLE III--SAFE DRINKING WATER ACT FUNDING

SEC. 301. USE OF STATE REVOLVING LOAN FUNDS.

    Section 1452(a)(2) of the Safe Drinking Water Act (42 U.S.C. 300j-
12(a)(2)) is amended--
            (1) by redesignating the first through fifth sentences as 
        subparagraphs (A) through (E), respectively, and by adjusting 
        the margins of such subparagraphs so as to align with 
        subparagraph (B) (as amended by paragraph (2) of this section); 
        and
            (2) by striking subparagraph (B), as so designated, and 
        inserting the following:
                    ``(B) Financial assistance under this section may 
                be used by a public water system only for expenditures 
                (not including monitoring, operation, and maintenance 
                expenditures) of a type or category which the 
                Administrator has determined, through guidance, will 
                facilitate compliance with national primary drinking 
                water regulations applicable to the system under 
                section 1412 or otherwise significantly further the 
                health protection objectives of this title, including 
                expenditures--
                            ``(i) for planning, design, and associated 
                        preconstruction activities;
                            ``(ii) to replace or rehabilitate aging 
                        treatment, storage (including reservoirs), or 
                        distribution facilities of public water 
                        systems;
                            ``(iii) for capital projects to upgrade or 
                        enhance the security of public water systems;
                            ``(iv) to consolidate management functions 
                        with other public water systems;
                            ``(v) to increase the energy efficiency or 
                        water efficiency (or both) of a public water 
                        system; or
                            ``(vi) for onsite projects to generate 
                        renewable energy for a public water system.''.

SEC. 302. PRIORITY SYSTEM REQUIREMENTS.

    Section 1452(b)(3) of the Safe Drinking Water Act (42 U.S.C. 300j-
12(b)(3)) is amended--
            (1) in subparagraph (B), by striking ``periodically'' and 
        inserting ``at least biennially'';
            (2) by redesignating subparagraph (B) as subparagraph (C);
            (3) by inserting after subparagraph (A) the following:
                    ``(B) Infrastructure improvement.--Notwithstanding 
                subparagraph (A), an intended use plan shall provide, 
                to the maximum extent practicable, that priority for 
                the use of at least \1/3\ of amounts made available 
                from the Water Protection and Reinvestment Trust Fund 
                established by section 9511 of the Internal Revenue 
                Code of 1986 to the State loan fund of the State be 
                given to projects to replace or rehabilitate aging 
                treatment, storage (including reservoirs), or 
                distribution facilities of public water systems that 
                regularly serve more than 100,000 persons.''; and
            (4) by adding at the end the following:
                    ``(D) Weight given to applications.--In determining 
                project priorities, the State shall give greater weight 
                to an application for assistance by a public water 
                system if the application includes--
                            ``(i) an inventory of assets, including a 
                        description of the condition of the assets;
                            ``(ii) a schedule for replacement of 
                        assets;
                            ``(iii) a financing plan that factors in 
                        all life-cycle costs indicating sources of 
                        revenue from ratepayers, grants, bonds, other 
                        loans, and other sources to meet the costs;
                            ``(iv) in the case of a public water system 
                        that regularly serves fewer than 10,000 
                        persons, a review of options for consolidating 
                        management functions of the system with 
                        management functions of other public water 
                        systems;
                            ``(v) reliance on methodologies or 
                        technologies that are environmentally 
                        sensitive, non-structural, or both 
                        environmentally sensitive and non-structural;
                            ``(vi) demonstration of consistency with 
                        State, regional, and municipal watershed plans;
                            ``(vii) a water conservation plan 
                        consistent with guidelines published for such 
                        plans by the Administrator pursuant to section 
                        1455(a);
                            ``(viii) approaches to improve the 
                        sustainability of the system such as--
                                    ``(I) water efficiency or 
                                conservation;
                                    ``(II) use of reclaimed water; and
                                    ``(III) actions to increase energy 
                                efficiency; and
                            ``(ix) such other information as the State 
                        determines necessary.''.

SEC. 303. AFFORDABILITY.

    Section 1452(d)(3) of the Safe Drinking Water Act (42 U.S.C. 300j-
12(d)(3)) is amended in the first sentence by inserting ``or portion of 
a service area'' after ``service area''.

SEC. 304. NEEDS SURVEY.

    Section 1452(h) of the Safe Drinking Water Act (42 U.S.C. 300j-
12(h)) is amended--
            (1) by striking ``The Administrator shall conduct'' and 
        inserting the following:
            ``(1) In general.--The Administrator shall conduct''; and
            (2) by adding at the end following:
            ``(2) Report.--Each report under paragraph (1) shall detail 
        the capital improvement needs of eligible public water systems 
        according to the population served by such water systems and 
        shall include not fewer than 4 size categories of public water 
        systems. One such size category shall consist of public water 
        systems serving a population of not less than 100,000 and the 
        other such size categories shall consist of public water 
        systems serving populations of less than 100,000.''.

SEC. 305. NEGOTIATION OF CONTRACTS.

    Section 1452 of the Safe Drinking Water Act (42 U.S.C. 300j-12) is 
amended by adding at the end the following:
    ``(s) Negotiation of Contracts.--A contract to be carried out using 
funds made directly available by a capitalization grant under this 
section for program management, construction management, feasibility 
studies, preliminary engineering, design, engineering, surveying, 
mapping, or architectural or related services shall be negotiated in 
the same manner as--
            ``(1) a contract for architectural and engineering services 
        is negotiated under chapter 11 of title 40, United States Code; 
        or
            ``(2) an equivalent State qualifications-based requirement 
        (as determined by the Governor of the State).''.

SEC. 306. DRINKING WATER TECHNICAL ASSISTANCE FOR COMMUNITIES.

    Section 1442(e) of the Safe Drinking Water Act (42 U.S.C. 300j-
1(e)) is amended--
            (1) in the first sentence, by striking ``The Administrator 
        may provide'' and inserting the following:
            ``(1) Public water systems.--The Administrator may 
        provide'';
            (2) by striking the term ``subsection'' each place it 
        appears and inserting ``paragraph'';
            (3) by striking the fifth sentence and all that follows and 
        inserting the following:
``In providing assistance under this paragraph, the Administrator shall 
give priority to small public water systems that have, either 
individually or collectively, the greatest need in the States, and to 
nonprofit organizations determined by the Administrator to be qualified 
and most effective at assisting such small public water systems.''; and
            (4) by adding at the end the following new paragraphs:
            ``(2) Wells and well systems.--
                    ``(A) In general.--The Administrator shall provide 
                grants to nonprofit organizations to provide technical 
                assistance to communities and individuals regarding the 
                design, operation, construction, and maintenance of 
                household wells and small shared well-systems that 
                provide drinking water.
                    ``(B) Form of assistance.--Technical assistance 
                referred to in subparagraph (A) may include--
                            ``(i) training and education;
                            ``(ii) operation of a hotline; and
                            ``(iii) conducting other activities 
                        relating to the design and construction of 
                        household, shared, and small water well 
                        systems.
                    ``(C) Priority.--In providing grants under this 
                paragraph, the Administrator shall give priority to 
                nonprofit organization applicants that, as determined 
                by the Administrator--
                            ``(i) are qualified;
                            ``(ii) will be the most effective at 
                        assisting those communities or individuals that 
                        have, either individually or collectively, the 
                        greatest need in the States; and
                            ``(iii) have demonstrated experience in 
                        providing similar technical assistance and in 
                        developing similar projects.
            ``(3) Funding.--
                    ``(A) Lobbying expenses.--No portion of any State 
                loan fund established under section 1452 and no portion 
                of any funds made available under this subsection may 
                be used for lobbying expenses.
                    ``(B) Indian tribes.--Of the total amount made 
                available under this subsection for each fiscal year, 3 
                percent shall be used for technical assistance to 
                public water systems owned or operated by Indian 
                tribes.''.

                  TITLE IV--ADDITIONAL GRANT PROGRAMS

SEC. 401. DEFINITIONS.

    In this title, the following definitions apply:
            (1) Academy.--The term ``Academy'' means the National 
        Academy of Sciences.
            (2) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (3) Community water system.--The term ``community water 
        system'' has the meaning given that term in section 1401 of the 
        Safe Drinking Water Act (42 U.S.C. 300f).
            (4) Public water system.--The term ``public water system'' 
        has the meaning given that term in section 1401 of the Safe 
        Drinking Water Act (42 U.S.C. 300f).
            (5) Treatment works.--The term ``treatment works'' has the 
        meaning given that term in section 212 of the Federal Water 
        Pollution Control Act (33 U.S.C. 1292).
            (6) Water protection and reinvestment trust fund.--The term 
        ``Water Protection and Reinvestment Trust Fund'' means the 
        trust fund established by section 9511 of the Internal Revenue 
        Code of 1986, as added by section 101(a) of this Act.

SEC. 402. TREATMENT WORKS AND COMMUNITY WATER SYSTEM SECURITY GRANTS.

    (a) Grants for Security Enhancements.--The Administrator may make a 
grant to any State, municipality, publicly owned treatment works, or 
community water system--
            (1) for capital projects that increase the security of the 
        community water system or publicly owned treatment works; and
            (2) for the completion or update of a vulnerability 
        assessment, emergency response plan, or site security plan 
        required under section 1433 of the Safe Drinking Water Act (42 
        U.S.C. 300i-2) or any other applicable law.
    (b) Federal Share.--The Federal share of the costs for which a 
grant is made under this section shall be 65 percent.
    (c) Funding.--The Administrator shall carry out this section using 
funds appropriated out of the Water Protection and Reinvestment Trust 
Fund that are allocated for that purpose under section 102.

SEC. 403. CLIMATE CHANGE MITIGATION AND ADAPTATION GRANTS.

    (a) Grant Program.--The Administrator shall carry out a competitive 
grant program to support efforts by publicly owned treatment works and 
community water systems to take actions to increase energy efficiency, 
reduce greenhouse gas emissions, and mitigate the impacts of climate 
change.
    (b) Eligible Activities.--In order to carry out the program under 
subsection (b), the Administrator shall award grants to publicly owned 
treatment works and community water systems for the following:
            (1) Facility or process modifications that reduce the use 
        of energy or water, or both.
            (2) The installation of small renewable energy generators, 
        including methane capture, wind turbines, and micro water 
        turbines.
            (3) Sustainable practices that minimize the adverse 
        environmental impacts of climate change on water quality and 
        quantity.
            (4) Projects that increase the ability of publicly owned 
        treatment works or community water systems to withstand the 
        impacts of climate change.
    (c) Federal Share.--The Federal share of the costs for which a 
grant is made under this section shall be 65 percent.
    (d) Maximum Grant Amount.--The Administrator shall not make a grant 
under this section to a grantee that exceeds $2,000,000 per fiscal 
year.
    (e) Funding.--The Administrator shall carry out this section using 
funds appropriated out of the Water Protection and Reinvestment Trust 
Fund that are allocated for that purpose under section 102.

SEC. 404. WORKFORCE DEVELOPMENT GRANTS.

    (a) Training Grants and Contracts.--
            (1) Funding.--The Administrator may make grants under 
        section 109 of the Federal Water Pollution Control Act (33 
        U.S.C. 1259), using funds appropriated out of the Water 
        Protection and Reinvestment Trust Fund that are allocated for 
        that purpose under section 102, to ensure that an adequate 
        supply of certified wastewater treatment operators exists.
            (2) Amendments.--Section 109 of such Act (33 U.S.C. 1259) 
        is amended--
                    (A) in the first sentence of subsection (a)--
                            (i) by striking ``operation,'' and 
                        inserting ``operation, construction,'';
                            (ii) by striking ``and other facilities'' 
                        and inserting ``other facilities (including 
                        stormwater treatment facilities)''; and
                            (iii) by inserting ``, and nonstructural 
                        treatment options'' after ``water quality 
                        control'';
                    (B) in subsection (b)(1) by striking 
                ``construction'' and inserting ``construction, 
                expansion, or modernization''; and
                    (C) in subsection (b) by striking paragraphs (3) 
                and (4) and inserting the following:
    ``(3) Facilities for which grants are awarded under this section 
before, on, or after the date of enactment of this section are eligible 
for additional funding for modernization and upgrades through grants 
under this section.''.
    (b) Application for Training Grant or Contract; Allocation of 
Grants or Contracts.--Section 110(2) of such Act (33 U.S.C. 1260(2)) is 
amended by striking ``United States'' and inserting ``States''.
    (c) Award of Scholarships.--
            (1) Funding.--The Administrator may award scholarships 
        under section 111 of the Federal Water Pollution Control Act 
        (33 U.S.C. 1261), using funds appropriated out of the Water 
        Protection and Reinvestment Trust Fund that are allocated for 
        that purpose under section 102, for undergraduate and graduate 
        study by persons who plan to enter an occupation involving the 
        operation and maintenance of treatment works.
            (2) Amendments.--Section 111 of such Act (33 U.S.C. 1261) 
        is amended--
                    (A) in paragraph (1)--
                            (i) by striking ``undergraduate'' and 
                        inserting ``undergraduate and graduate'';
                            (ii) by striking ``operation'' and 
                        inserting ``construction, operation,''; and
                            (iii) by striking ``but not to exceed four 
                        academic years'';
                    (B) in paragraph (2)--
                            (i) by striking ``use of individuals'' and 
                        inserting ``use by individuals'';
                            (ii) by striking ``United States'' 
                        inserting ``States''; and
                            (iii) by striking ``secondary'' and 
                        inserting ``secondary and post-secondary''; and
                    (C) in paragraph (3)(D) by striking ``operation'' 
                each place it appears and inserting ``design, 
                operation,''.
    (d) Research, Technical Assistance, Information, Training of 
Personnel.--The Administrator may establish training programs and make 
grants under section 1442(c) of the Safe Drinking Water Act (42 U.S.C. 
300j-1(c)) using funds appropriated out of the Water Protection and 
Reinvestment Trust Fund that are allocated for that purpose under 
section 102.

SEC. 405. SEWER OVERFLOW CONTROL GRANTS.

    (a) In General.--The Administrator may make grants under section 
221 of the Federal Water Pollution Control Act (33 U.S.C. 1301) using 
funds appropriated out of the Water Protection and Reinvestment Trust 
Fund that are allocated for that purpose under section 102.
    (b) Prioritization.--Section 221(b) of the Federal Water Pollution 
Control Act (33 U.S.C. 1301(b)) is amended--
            (1) by striking ``or'' at the end of paragraph (3);
            (2) by striking the period at the end of paragraph (4) and 
        inserting ``; or''; and
            (3) by adding at the end the following:
            ``(5) is applying for a grant for a project that involves 
        the use of--
                    ``(A) nonstructural, low-impact development;
                    ``(B) water conservation, efficiency, or reuse; or
                    ``(C) other decentralized stormwater or wastewater 
                approaches to minimize flows into sewer systems.''.
    (c) Conforming Amendments.--Section 221(a) of such Act (33 U.S.C. 
1301(a)) is amended--
            (1) by striking ``In any'' and all that follows through 
        ``(1) the'' and inserting ``The'';
            (2) by striking ``overflows'' and all that follows through 
        ``(2) subject to'' and inserting ``overflows. Subject to''; and
            (3) by striking ``paragraph (1)'' and inserting ``the 
        preceding sentence''.

SEC. 406. RESEARCH, DEVELOPMENT, AND TECHNOLOGY DEMONSTRATION PROGRAM.

    (a) In General.--Not later than one year after the date of 
enactment of this Act, the Administrator shall establish a national 
water infrastructure research, development, and demonstration program 
to develop, demonstrate, and transfer innovative or improved 
technologies and methods for the treatment, control, transport, and 
reuse of drinking water and wastewater. These technologies and methods 
may include--
            (1) reducing energy consumption in water and wastewater 
        infrastructure;
            (2) recovering energy and nutrient resources from 
        wastewater;
            (3) reducing water consumption and returning water for 
        ecosystem use;
            (4) on-site technologies to generate renewable energy at a 
        publicly owned treatment works, community water system, or 
        other municipal water or wastewater facility;
            (5) measures to control, manage, reduce, treat, infiltrate, 
        or reuse municipal stormwater;
            (6) decentralized or distributed stormwater and wastewater 
        controls and treatment;
            (7) low impact development technologies and non-structural 
        approaches to treat drinking water, wastewater, and stormwater;
            (8) reducing the costs of compliance with the Federal Water 
        Pollution Control Act (33 U.S.C. 1251 et seq.) and the Safe 
        Drinking Water Act (42 U.S.C. 300f et seq.), while retaining or 
        enhancing environmental benefits;
            (9) improving control and treatment of stormwater and 
        nonpoint sources of pollution;
            (10) mitigating and adapting to climate change;
            (11) dual systems that re-use stormwater and wastewater for 
        non-potable water resource needs;
            (12) development of a new generation of water monitoring 
        reporting and notification techniques; and
            (13) controlling, limiting, treating, or preventing 
        pharmaceutical and personal care products from being in or 
        entering waters of the United States.
    (b) Consultation.--In administering the program under this section, 
the Administrator shall annually hold a national meeting to bring 
together major stakeholders, including representatives from the 
following:
            (1) The public.
            (2) States, local governments, and organizations 
        representing States or local governments.
            (3) The National Science Foundation, the National Academy 
        of Science, the National Academy of Engineering, the Army Corps 
        of Engineers, the National Oceanic and Atmospheric 
        Administration, the Department of Agriculture, the United 
        States Geological Survey, the White House Office of Science and 
        Technology Policy, the Department of Energy, and the Council on 
        Environmental Quality.
            (4) Universities, colleges, and other institutions of 
        higher education.
            (5) Other public nonprofit entities with expertise in 
        research and development of technologies for the treatment, 
        control, transport, and re-use of drinking water, stormwater, 
        and wastewater.
    (c) Cooperative Agreements or Grants.--In carrying out the program 
under this section, the Administrator may enter into cooperative 
agreements or make grants or, both, to develop improved technologies 
and methods under subsection (a) with or to nonprofit and governmental 
entities having demonstrated expertise in research and development of 
the treatment, control, transport, and re-use of drinking water, 
stormwater, and wastewater, including the following entities:
            (1) The Water Environment Research Foundation.
            (2) The Water Research Foundation.
            (3) Public nonprofit entities, including those whose 
        members or subscribers include drinking water, stormwater, and 
        wastewater utilities and local governments.
            (4) Universities, colleges, and other institutions of 
        higher education.
            (5) Local governments, including publicly owned treatment 
        works and community water systems.
            (6) The National Science Foundation.
            (7) The National Institutes for Water Resources.
    (d) Demonstration Projects.--The Administrator is authorized to 
enter into cooperative agreements with entities described in subsection 
(c) and for-profit entities to demonstrate the viability and 
effectiveness of a new technology for the treatment, control, 
transport, and re-use of drinking water, stormwater, or wastewater.
    (e) Selection.--In entering into cooperative agreements and making 
grants under subsection (c), the Administrator shall give priority to 
cooperative agreements and grants that--
            (1) create multiple environmental, social, and economic 
        benefits for communities; and
            (2) consider--
                    (A) a variety of water resource opportunities and 
                needs;
                    (B) unique and diverse geology and geography;
                    (C) the ability to provide the greatest 
                technological diversity using limited financial 
                resources; and
                    (D) the commitment of each community or regional 
                area to find and fund appropriate alternative 
                technologies to resolve their water infrastructure 
                needs.
    (f) Federal Share.--The Federal share of the costs for which a 
grant is made under this section shall be 65 percent; except that the 
Administrator may increase such Federal share based on the purpose for 
which the grant is made and the type of grant recipient.
    (g) Funding.--The Administrator shall carry out this section using 
funds appropriated out of the Water Protection and Reinvestment Trust 
Fund that are allocated for that purpose under section 102.
    (h) Report to Congress.--The Administrator shall prepare and submit 
a biennial report to Congress on the results of technology research, 
development, and full-scale demonstrations performed under this section 
and recommendations for encouraging the use of such technologies by 
drinking water, stormwater, and wastewater utilities.

SEC. 407. REGIONAL WATER RESEARCH CENTERS.

    (a) Regional Centers.--
            (1) Grants.--The Administrator, in collaboration with the 
        Director of the National Science Foundation, shall make grants 
        to nonprofit institutions of higher learning to establish and 
        operate one university water research center in each of such 21 
        hydro-regions as the Administrator, in consultation with the 
        United States Geological Survey, may establish. The 
        Administrator, in consultation with the United States 
        Geological Survey, may adjust the boundaries of such regions to 
        assure that none of the conterminous regions are either larger 
        or smaller than another by more than two fold.
            (2) Designation of national water research center.--The 
        Administrator, in collaboration with the Director, shall 
        designate one of the 21 university water research centers as 
        the ``National Water Research Center''.
            (3) Mission.--
                    (A) In general.--The mission of the centers shall 
                be to conduct and coordinate strategic research, 
                education, and outreach for sustainable management of 
                water resources in every hydro-climatic region of the 
                United States.
                    (B) National water research center.--In addition to 
                its mission under subparagraph (A), the mission of the 
                National Water Research Center shall be to gather, 
                archive, and publish data from the regional centers and 
                to integrate the regional findings into a national 
                research strategy.
            (4) Definition.--For purposes of this section, the term 
        ``nonprofit institution of higher learning'' includes a 
        consortium of nonprofit institutions of higher learning.
    (b) Selection of Grant Recipients.--
            (1) Applications.--In order to be eligible to receive a 
        grant under this section, a nonprofit institution of higher 
        learning shall submit to the Administrator an application that 
        is in such form and contains such information as the 
        Administrator may require.
            (2) Selection criteria.--Except as otherwise provided by 
        this section, the Administrator, in collaboration with the 
        Director, shall select each recipient of a grant under this 
        section through a competitive process on the basis of the 
        following:
                    (A) The location of the center within the region to 
                be served.
                    (B) The demonstrated research and extension 
                resources available to the recipient to carry out the 
                objectives of this section.
                    (C) The capability of the recipient to provide 
                leadership in making national and regional 
                contributions to the solution of immediate and long-
                range water supply, water infrastructure, and water 
                quality problems.
                    (D) The recipient's establishment of a water 
                program encompassing several areas of water research.
                    (E) The recipient's demonstrated commitment of at 
                least $400,000 each year in regularly budgeted 
                institutional amounts to support ongoing research in 
                water and education programs through a statewide or 
                region-wide continuing education program.
                    (F) The recipient's demonstrated ability to 
                disseminate results of water research and education 
                programs through a statewide or region-wide continuing 
                education program,
                    (G) The strategic plan the recipient proposes to 
                implement in order to carry out the purposes for which 
                the grant will be made.
                    (H) The recipient's demonstration that it has a 
                well-established, nationally recognized program in 
                water research and education, as evidenced by--
                            (i) not less than 10 graduate degrees 
                        awarded in professional fields closely related 
                        to water each year for each of the 5 calendar 
                        years preceding the date of the submission of 
                        the application for the grant; and
                            (ii) not less than 10 tenured or tenure-
                        track faculty members who specialize on a full-
                        time basis in professional fields closely 
                        related to water who, as a group, have 
                        published a total or at least 50 journal 
                        publications on water research during the 
                        preceding 5 calendar years.
    (c) Objectives.--Except for a grant for the establishment and 
operation of the National Water Research Center, a grant made under 
this section may only be used to establish and operate a university 
water research center in accordance with this section, including the 
conduct of the following activities and programs:
            (1) Research.--Basic and applied research, the products of 
        which are judged by peers or other experts in the field of 
        water to advanced the body of knowledge in water availability 
        and use, water quality, water infrastructure sustainability, 
        and water institutions.
            (2) Education.--An education program relating to water that 
        includes multidisciplinary course work and participation in 
        research.
            (3) Technology transfer.--An ongoing program of technology 
        transfer that makes water research results available to 
        potential users, including policymakers, in a form that can be 
        implemented, utilized, or otherwise applied.
    (d) Continuing Grants.--
            (1) Period of grants.--After selecting a nonprofit 
        institution of higher learning as a grant recipient on the 
        basis of a competition conducted under this section, the 
        Administrator, in collaboration with the Director, shall make a 
        grant to the selected grant recipient to establish and operate 
        a regional university water center under this section in each 
        of the first 5 fiscal years beginning after the date of the 
        competition.
            (2) Grant agreement.--In order to be eligible to receive a 
        grant under this section, a recipient shall enter into an 
        agreement with the Administrator to ensure that the recipient 
        will maintain total expenditures from all other sources to 
        establish and operate a university water research center 
        (including the conduct of activities and programs the center is 
        authorized to carry out under subsection (c) and subsections 
        (a)(3)(B) and (f) in the case of the National Water Research 
        Center) at least equal to the average level of such 
        expenditures in its 2 fiscal years before the award of the 
        grant under this section.
            (3) Competition deadline.--Not later than the last day of 
        the one-year period following the date of enactment of this Act 
        and March 31st of each 5th year thereafter, the Administrator, 
        in collaboration with the Director, shall complete a 
        competition among nonprofit institutions of higher learning for 
        grants to establish and operate the 21 regional university 
        water centers referred to in subsection (a).
            (4) Amount of grants.--The Administrator shall make a grant 
        to a nonprofit institution of higher learning selected under 
        this section to be a grant recipient for the establishment and 
        operation of a regional university water center (including the 
        conduct of activities and programs described in subsection (c)) 
        of at least $2,000,000 for each fiscal year but no more than 
        $4,000,000; except that a grant for establishment and operation 
        of the National Water Research Center (including the conduct of 
        the activities described in subsections (a)(3)(B), (c), and 
        (f)) shall be at least $6,000,000 for each fiscal year but no 
        more than $12,000,000.
    (e) Federal Share.--The Federal share of the costs of establishment 
and operation of a center under this section (including the conduct of 
the activities and programs the center is authorized to carry out under 
subsection (c) and subsections (a)(3)(B) and (f) in the case of the 
Nation Water Research Center) through a grant made under this section 
shall be 50 percent in the case of a regional university water center 
and 85 percent in the case of the National Water Research Center.
    (f) Program Coordination.--
            (1) Coordination.--The Administrator, working through the 
        National Water Research Center, shall--
                    (A) support a network of university water centers 
                to coordinate and facilitate information technology 
                development and implementation across the centers;
                    (B) coordinate research, education, training, and 
                technology transfer activities that grant recipients 
                are authorized to carry out under this section;
                    (C) synthesize research conducted under this 
                section;
                    (D) disseminate the results of the research; and
                    (E) establish and operate a clearinghouse to 
                disseminate the results of the research.
            (2) Annual review and evaluation.--At least annually, the 
        Administrator shall review and evaluate the activities and 
        programs that grant recipients carry out through the use of 
        grants made to such recipients under this section.
            (3) Funding limitation.--The Administrator may not use more 
        than one percent of the amounts made available to carry out 
        this section for a fiscal year to carry out management and 
        oversight of the centers established through grants made under 
        this section.
    (g) Funding.--The Administrator shall carry out this section using 
funds appropriated out of the Water Protection and Reinvestment Trust 
Fund that are allocated for that purpose under section 102.
    (h) Limitation on Availability of Funds.--Funds made available to 
carry out this section shall remain available for obligation by the 
Administrator for a period of 2 years after the last day of the fiscal 
year for which the funds are authorized.

SEC. 408. COST OF SERVICE STUDY.

    (a) In General.--Not later than 2 years after the date of enactment 
of this Act, the Administrator shall enter an arrangement with the 
Academy under which the Academy shall complete and provide to the 
Administrator the results of a study of the means by which public water 
systems and treatment works selected by the Academy in accordance with 
subsection (c) meet the costs associated with operations, maintenance, 
capital replacement, and regulatory requirements. In addition, the 
study shall be conducted for the purposes set forth in subsection (b).
    (b) Required Elements.--
            (1) Affordability.--The purposes of the study shall be, at 
        a minimum, to--
                    (A) determine whether the rates at public water 
                systems and treatment works for communities included in 
                the study are using a full-cost pricing model;
                    (B) identify, if a full-cost pricing model is not 
                being used, any incentive rate systems that have been 
                successful in significantly reducing--
                            (i) per capita water demand;
                            (ii) the volume of wastewater flows;
                            (iii) the volume of stormwater runoff; or
                            (iv) the quantity of pollution generated by 
                        stormwater;
                    (C) identify a set of best industry practices that 
                public water systems and treatment works may use in 
                establishing a rate structure that--
                            (i) adequately addresses the true cost of 
                        services provided to consumers by public water 
                        systems and treatment works, including 
                        infrastructure replacement;
                            (ii) encourages water conservation; and
                            (iii) takes into consideration the needs of 
                        disadvantaged individuals and communities, as 
                        identified by the Administrator;
                    (D) identify existing standards for affordability 
                and the manner in which those standards are determined 
                and defined;
                    (E) determine the manner in which affordability 
                varies with respect to communities of different sizes 
                and in different regions; and
                    (F) determine the extent to which affordability 
                affects the decision of a community to increase public 
                water system and treatment works rates (including the 
                decision relating to the percentage by which those 
                rates should be increased).
            (2) Disadvantaged communities.--In addition, the purposes 
        of the study shall be, at a minimum, to--
                    (A) survey a cross-section of States representing 
                different sizes, demographics, and geographical 
                regions;
                    (B) describe, for each State surveyed under 
                subparagraph (A), the definition of ``disadvantaged 
                community'' used in the State in carrying out projects 
                and activities under the Safe Drinking Water Act (42 
                U.S.C. 300f et seq.);
                    (C) review other means of identifying the meaning 
                of the term ``disadvantaged'', as that term applies to 
                communities;
                    (D) determine which factors and characteristics are 
                required for a community to be considered 
                ``disadvantaged''; and
                    (E) evaluate the degree to which factors such as a 
                reduction in the tax base over a period of time, a 
                reduction in population, the loss of an industrial 
                base, and the existence of areas of concentrated 
                poverty are taken into account in determining whether a 
                community is a disadvantaged community.
    (c) Selection of Communities.--The Academy shall select the public 
water systems and treatment works for the study under subsection (a) 
from a cross-section of communities representing various populations, 
income levels, demographics, and geographical regions.
    (d) Funding.--The Administrator shall carry out this section using 
funds appropriated out of the Water Protection and Reinvestment Trust 
Fund that are allocated for that purpose under section 102.

SEC. 409. DRUG TAKE-BACK GRANTS.

    (a) Grant Program.--
            (1) In general.--Not later than one year after the date of 
        enactment of this Act, the Administrator shall establish a 
        competitive grant program to make grants to local and State 
        organizations, tribes, nonprofit entities, and other government 
        entities--
                    (A) to take back prescription and over-the-counter 
                drugs from the public; and
                    (B) to dispose of the drugs in an environmentally 
                sound manner.
            (2) Requirements.--In order to be eligible to receive a 
        grant under this subsection, each applicant for such a grant 
        shall demonstrate to the satisfaction of the Administrator 
        that, in undertaking the activities described in paragraph (1) 
        under the grant, the applicant will--
                    (A) protect public safety by ensuring that the 
                drugs will be properly disposed of;
                    (B) incorporate environmentally sound practices for 
                disposing of controlled substances (by means other than 
                disposal into a public or private wastewater treatment 
                system or a municipal solid waste landfill);
                    (C) follow the existing requirements of the 
                Controlled Substances Act (21 U.S.C. 801 et seq.); and
                    (D) meet such additional requirements as the 
                Administrator may establish.
            (3) Collection of different types of drugs.--
                    (A) In general.--A take-back program does not need 
                to collect and dispose of both prescription and over-
                the-counter drugs to be eligible for grant funding 
                under this subsection.
                    (B) Preference.--Notwithstanding subparagraph (A), 
                the Administrator, in awarding grants under this 
                subsection, may give preference to applicants proposing 
                to collect and dispose of both prescription and over-
                the-counter drugs.
            (4) No funding restriction.--Entities receiving funds under 
        this subsection may continue to receive funding from other 
        public and private sources.
            (5) Definitions.--In this subsection:
                    (A) The term ``drug''--
                            (i) has the meaning given to such term in 
                        section 201 of the Federal Food, Drug, and 
                        Cosmetic Act (21 U.S.C. 321); and
                            (ii) includes a biological product, as 
                        defined in section 351 of the Public Health 
                        Service Act (42 U.S.C. 262).
                    (B) The term ``over-the-counter'', with respect to 
                a drug, means not subject to section 503(b)(1) of the 
                Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
                353(b)(1)).
                    (C) The term ``prescription'', with respect to a 
                drug, means subject to section 503(b)(1) of the Federal 
                Food, Drug, and Cosmetic Act (21 U.S.C. 353(b)(1)).
            (6) Funding.--The Administrator shall carry out this 
        subsection using funds appropriated out of the Water Protection 
        and Reinvestment Trust Fund that are allocated for that purpose 
        under section 102.
    (b) Labeling of Drugs and Biological Products.--
            (1) Prohibition on labeling recommendations to dispose of 
        drugs and biological products by flushing.--Section 505 of the 
        Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) is amended 
        by adding at the end the following:
    ``(w) No Labeling Recommendations To Dispose by Flushing.--In 
approving an application for a drug under this section, the Secretary 
of Health and Human Services shall ensure that the labeling for such 
drug does not include any recommendation or direction to dispose of the 
drug by means of a public or private wastewater treatment system, such 
as by flushing down the toilet.''.
            (2) Biological products.--Section 351 of the Public Health 
        Service Act (42 U.S.C. 262) is amended by adding at the end the 
        following:
    ``(k) No Labeling Recommendations To Dispose by Flushing.--In 
licensing any biological product under this section, the Secretary 
shall ensure that the labeling for such product does not include any 
recommendation or direction to dispose of the product by means of a 
public or private wastewater treatment system, such as by flushing down 
the toilet.''
            (3) Drugs and biological products already marketed.--
                    (A) Labeling revision.--With respect to drugs and 
                biological products that are legally marketed under the 
                Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321 et 
                seq.) or part F of title III of the Public Health 
                Service Act (42 U.S.C. 262 et seq.) as of the date of 
                enactment of this Act, the Secretary of Health and 
                Human Services, acting through the Commissioner of Food 
                and Drugs--
                            (i) shall conduct a review of the labeling 
                        of such drugs and biological products; and
                            (ii) for any such labeling that includes a 
                        recommendation or direction to dispose of the 
                        drug or biological product by means of a public 
                        or private wastewater treatment system, such as 
                        by flushing down the toilet, shall order the 
                        labeling to be revised to exclude such 
                        recommendation or direction.
                    (B) Penalty.--Any drug or biological product whose 
                labeling is in violation of an order issued under 
                subparagraph (A)(ii) is deemed to be misbranded under 
                section 502 of the Federal Food, Drug, and Cosmetic Act 
                (21 U.S.C. 352).
                    (C) Effective date.--An order issued under 
                subparagraph (A)(ii) shall take effect not later than 
                one year after the date of enactment of this Act.
                    (D) Definitions.--In this subsection:
                            (i) Biological product.--The term 
                        ``biological product'' has the meaning given to 
                        such term in section 351 of the Public Health 
                        Service Act (42 U.S.C. 262).
                            (ii) Drug and labeling.--The terms ``drug'' 
                        and ``labeling'' have the meanings given to 
                        such terms in section 201 of the Federal Food, 
                        Drug, and Cosmetic Act (21 U.S.C. 321).

SEC. 410. STATE REVOLVING FUND REVIEW PROCESS.

    As soon as practicable after the date of enactment of this Act, the 
Administrator shall--
            (1) consult with States, utilities, nonprofit 
        organizations, and other Federal agencies providing financial 
        assistance to identify ways to expedite and improve the 
        application and review process for the provision of assistance 
        from--
                    (A) the State water pollution control revolving 
                funds established under title VI of the Federal Water 
                Pollution Control Act (33 U.S.C. 1381 et seq.); and
                    (B) the State drinking water treatment revolving 
                loan funds established under section 1452 of the Safe 
                Drinking Water Act (42 U.S.C. 300j-12);
            (2) consider the needs of treatment works and public water 
        systems in carrying out such Acts and this Act;
            (3) take such administrative action as is necessary to 
        expedite and improve the process as the Administrator has 
        authority to take under existing law;
            (4) collect information relating to innovative approaches 
        taken by any State to simplify the application process of the 
        State and provide the information to each State; and
            (5) submit to Congress a report that, based on the 
        information identified under paragraph (1), contains 
        recommendations for legislation to facilitate further 
        streamlining and improvement of the process described in 
        paragraph (1).
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