Union Calendar No. 247
104TH CONGRESS
2D SESSION
H. R. 2747
[Report No. 104–515]
A BILL
To direct the Administrator of the Environmental
Protection Agency to make grants to States for
the purpose of financing the construction, reha-
bilitation, and improvement of water supply sys-
tems, and for other purposes.
MARCH 29, 1996
Reported with an amendment, committed to the Commit-
tee of the Whole House on the State of the Union, and
ordered to be printed
IB
Union Calendar No. 247
104TH CONGRESS
2D SESSION
H. R. 2747
[Report No. 104–515]
To direct the Administrator of the Environmental Protection Agency to make
grants to States for the purpose of financing the construction, rehabilita-
tion, and improvement of water supply systems, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
DECEMBER 7, 1995
Mr. SHUSTER (for himself, Mr. OBERSTAR, Mr. BOEHLERT, Mr. BORSKI, Mr.
CLINGER, Mr. RAHALL, Mr. PETRI, Mr. LIPINSKI, Mr. WISE, Mr. TRAFI-
CANT, Mr. HAYES, Mr. COBLE, Mr. ZELIFF, Mr. COSTELLO, Mr.
POSHARD, Mr. HUTCHINSON, Mr. CRAMER, Mr. BAKER of California,
Miss COLLINS of Michigan, Ms. NORTON, Mr. HORN, Mr. FRANKS of
New Jersey, Ms. DANNER, Mr. BLUTE, Mr. QUINN, Mrs. FOWLER, Mr.
BARCIA, Mr. EHLERS, Mr. BACHUS, Mr. TUCKER, Ms. EDDIE BERNICE
JOHNSON of Texas, Mr. WAMP, Mr. BREWSTER, Mr. LATHAM, Mr.
LATOURETTE, Mr. MASCARA, Mrs. SEASTRAND, Mr. LAHOOD, Mr. MAR-
TINI, and Mr. MCHALE) introduced the following bill; which was referred
to the Committee on Transportation and Infrastructure
MARCH 29, 1996
Additional sponsors: Mrs. KELLY, Mr. CLYBURN, Mr. YOUNG of Alaska, Mr.
MINGE, and Mr. WELLER
MARCH 29, 1996
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on December 7, 1995]
A BILL
To direct the Administrator of the Environmental Protection
Agency to make grants to States for the purpose of
financing the construction, rehabilitation, and improve-
ment of water supply systems, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Water Supply Infra-
structure Assistance Act of 1996’’.
SEC. 2. PURPOSES.
The purposes of this Act are as follows:
(1) To provide grants for establishment of State
revolving funds for the purpose of providing financial
and technical assistance for the construction, rehabili-
tation, and improvement of water supply systems, in-
cluding treatment to remove pollutants from navi-
gable waters for the purpose of making such waters
usable by water supply systems and for source water
quality protection programs.
(2) To provide for administrative efficiencies
through implementation of this Act relying on exist-
ing mechanisms of State water pollution control re-
volving loan fund programs established pursuant to
title VI of the Federal Water Pollution Control Act.
SEC. 3. LIMITATION ON STATUTORY CONSTRUCTION.
Nothing in this Act shall be construed as affecting the
requirements of title XIV of the Public Health Service Act
(42 U.S.C. 300f–300j–9), commonly referred to as the Safe
Drinking Water Act.
SEC. 4. DEFINITIONS.
In this Act, the following definitions apply:
(1) 
ADMINISTRATOR.—The 
term 
‘‘Adminis-
trator’’ means the Administrator of the Environ-
mental Protection Agency.
(2) DISADVANTAGED
COMMUNITY.—The term
‘‘disadvantaged community’’ means the service area
of a water supply system with respect to which the
average annual residential charges for a user of the
water supply system meet affordability criteria estab-
lished by the State in which the water supply system
is located (after providing for public review and com-
ment) in accordance with guidelines to be established
by the Administrator, in cooperation with the States.
(3) INDIAN TRIBE.—The term ‘‘Indian tribe’’ has
the meaning such term has under section 518 of the
Federal Water Pollution Control Act and includes
Alaska Native Villages and former Indian reserva-
tions in Oklahoma.
(4) SMALL WATER SUPPLY SYSTEM.—The term
‘‘small water supply system’’ means a water supply
system that serves a population of 10,000 or fewer.
(5) STATE.—The term ‘‘State’’ means a State,
the District of Columbia, the Commonwealth of Puer-
to Rico, the Virgin Islands, Guam, American Samoa,
the Commonwealth of the Northern Mariana Islands,
and the Trust Territory of the Pacific Islands.
(6) WATER SUPPLY SYSTEM.—The term ‘‘water
supply system’’ means a system for the provision to
the public of piped water for human consumption if
such system has at least 15 service connections or reg-
ularly serves at least 25 individuals and a draw and
fill system for the provision to the public of water for
human consumption. Such term does not include a
for-profit system that has fewer than 15 service con-
nections used by year-round residents of the area
served by the system or a for-profit system that regu-
larly serves fewer than 25 year-round residents and
does not include a system owned by a Federal agency.
Such term includes (A) any collection, treatment,
storage, and distribution facilities under control of
the operator of such system and used primarily in
connection with such system, and (B) any collection
or pretreatment facilities not under such control that
are used primarily in connection with such system.
SEC. 5. GRANTS TO STATES.
Subject to the provisions of this Act, the Administrator
shall make grants to each State for the purpose of establish-
ing a water supply infrastructure account in the State
water pollution control revolving loan fund programs estab-
lished pursuant to title VI of the Federal Water Pollution
Control Act, if any, to provide assistance (1) for the con-
struction, rehabilitation, and improvement of water supply
systems, and (2) consistent with nonpoint source manage-
ment programs established under section 319 of the Federal
Water Pollution Control Act, for source water quality pro-
tection programs to address pollutants in navigable waters
for the purpose of making such waters usable by water sup-
ply systems.
SEC. 6. GRANT AGREEMENTS.
(a) GENERAL RULE.—To receive a grant with funds
made available under section 13, a State shall enter into
an agreement with the Administrator which shall include,
but not be limited to, the specifications set forth in sub-
section (b) of this section.
(b) SPECIFIC REQUIREMENTS.—The Administrator
shall enter into an agreement under this section with a
State only after the State has established to the satisfaction
of the Administrator that—
(1) the State will accept grant payments with
funds to be made available under this Act and will
deposit all such payments in the water supply infra-
structure account established by the State in accord-
ance with this Act;
(2) if the State has a water pollution control re-
volving fund established in accordance with title VI
of the Federal Water Pollution Control Act, the State
will establish the water supply infrastructure account
as a separate account in such fund;
(3) the State will deposit in the water supply in-
frastructure account from State moneys an amount
equal to at least 20 percent of the total amount of all
grants which will be made to the State with funds to
be made available under section 13 on or before (A)
the date on which each grant payment will be made
to the State under this Act (other than sections 14
and 15), or (B) September 30, 1998, in the case of
grant payments made from funds appropriated for
fiscal years 1995, 1996, and 1997;
(4) the State will enter into binding commit-
ments to provide assistance in accordance with this
Act in an amount equal to 120 percent of the amount
tation, and improvement of a water supply system
undertaken with funds directly made available by
grants under section 5, such system will provide
water supply services at the most economical cost, in-
cluding consideration of water conservation measures,
as determined by the applicant; and
(8) the State will make annual reports to the Ad-
ministrator on the actual use of funds in accordance
with section 606(d) of the Federal Water Pollution
Control Act.
SEC. 7. INCORPORATION OF FWPCA BY REFERENCE.
(a) GENERAL RULE.—The provisions of title VI of the
Federal Water Pollution Control Act shall apply as pro-
vided in this Act to accounts established by States under
this Act. For purposes of this Act, any reference to the Fed-
eral Water Pollution Control Act and to any section thereof
shall be treated as a reference to such Act or section as in
effect on the date of the enactment of this Act.
(b) TYPES OF ASSISTANCE.—
(1) IN GENERAL.—Section 603(d) of the Federal
Water Pollution Control Act shall apply to accounts
established by States under this Act to the same extent
and in the same manner as such section applies to
water pollution control revolving funds under such
Act.
(2) EXCEPTIONS FOR DISADVANTAGED COMMU-
NITIES.—
(A) 
TERM
OF
LOAN.—Notwithstanding
paragraph (1), the repayment period referred to
in section 603(d)(1)(A) of the Federal Water Pol-
lution Control Act for a loan made from a State
water supply infrastructure account to a dis-
advantaged community shall be the lesser of 40
years or the expected life of the project to be fi-
nanced with the proceeds of the loan and the
date for full loan amortization referred to in sec-
tion 603(d)(1)(B) of such Act shall be the date
of the expiration of the term of the loan.
(B) NEGATIVE INTEREST RATES.—In any
case in which the State is making a loan from
its water supply infrastructure account to a dis-
advantaged community, the State may charge a
negative annual interest rate of not to exceed 2
percent to reduce the unpaid principal of the
loan. The aggregate amount of all such negative
interest rate loans the State makes in a fiscal
year shall not exceed 20 percent of the funds in
the water supply infrastructure account of the
State.
(3) EXCEPTION FOR DISTRICT OF COLUMBIA AND
TERRITORIES.—In the case of a water supply infra-
structure account established by the District of Co-
lumbia, American Samoa, Guam, the Commonwealth
of the Northern Mariana Islands, the Commonwealth
of Puerto Rico, the Pacific Trust Territories, or the
Virgin Islands, the account may be used directly by
the State for construction, rehabilitation, and im-
provement of a water supply system.
(c) CORRECTIVE ACTION.—Section 605 of the Federal
Water Pollution Control Act shall apply to a State’s agree-
ment with the Administrator under this Act and to require-
ments of this Act to the same extent and in the same man-
ner as such section applies to a State’s agreement under
section 602 of such Act and the requirements of title VI of
such Act.
(d) AUDITS, REPORTS, AND FISCAL CONTROLS.—Sub-
sections (a), (b), (d), and (e) of section 606 of the Federal
Water Pollution Control Act shall apply to a State estab-
lishing an account under this Act and to such account to
the same extent and in the same manner as such subsections
apply to a State establishing a water pollution control re-
volving fund under title VI of such Act and to such fund.
SEC. 8. WATER SUPPLY INFRASTRUCTURE REVOLVING
LOAN FUNDS.
(a) REQUIREMENTS
FOR
OBLIGATION
OF
GRANT
FUNDS.—Before a State may receive a grant with funds
made available under section 13, the State shall first estab-
lish a water supply infrastructure account which complies
with the requirements of this Act.
(b) ADMINISTRATOR.—Each State water supply infra-
structure account shall be administered by an instrumental-
ity of the State with such powers and limitations as may
be required to operate such account in accordance with the
requirements and purposes of this Act.
(c) PROJECTS
ELIGIBLE
FOR
ASSISTANCE.—The
amounts of funds available to each State water supply in-
frastructure account shall be used only for providing finan-
cial assistance (1) for construction, rehabilitation, and im-
provement of water supply systems, and (2) consistent with
nonpoint source management programs established under
section 319 of the Federal Water Pollution Control Act and
subject to subsection (d)(3), for source water quality protec-
tion programs to address pollutants in navigable waters for
the purpose of making such waters usable by water supply
systems. In addition, amounts in such account may be used
to provide assistance to undertake feasible and appropriate
changes in operations of the water supply system (including
ownership, management, accounting, rates, maintenance,
consolidation, alternative water supply, or other proce-
dures) if the State determines that such measures are nec-
essary to ensure adequate construction, operation, and
maintenance of the water supply system. The account shall
be established, maintained, and credited with repayments,
and the account balance shall be available in perpetuity
for providing such assistance.
(d) TYPES OF ASSISTANCE.—In addition to the types
of assistance which may be made available under section
603(d) of the Federal Water Pollution Control Act from a
water supply infrastructure account of a State under this
Act—
(1) up to 2 percent of the funds in such account
may be used to provide technical assistance with re-
spect to construction, rehabilitation, and improve-
ment of water supply systems;
(2) up to 10 percent of the funds in such account
may be used to provide technical and financial assist-
ance described in subsection (c)(2);
(3) up to 1⁄4 of the 10 percent set-aside under
paragraph (2) may be used to make grants to pay 50
percent of the cost of the source water quality protec-
tion programs described in subsection (c)(2); and
(4) such account may be used to provide loan
guarantees for developing and implementing innova-
tive technologies.
(e) ACQUISITION OF LANDS.—Assistance provided with
funds made available under section 13 may be used for the
acquisition of lands and other interests in lands; however,
nothing in this Act authorizes the acquisition of lands or
other interests in lands from other than willing sellers.
SEC. 9. ALLOTMENT OF FUNDS.
(a) FISCAL YEAR 1996.—Sums authorized to be ap-
propriated pursuant to section 13 for fiscal year 1996 shall
be allotted for such year by the Administrator not later than
the 10th day which begins after the date of the enactment
of this Act. Sums authorized for such fiscal year shall be
allotted in accordance with the following table:
States:
Percentages:
Alabama ..............................................................................................
0.98
Alaska .................................................................................................
2.34
Arizona ...............................................................................................
1.36
Arkansas .............................................................................................
0.98
California ...........................................................................................
6.27
Colorado ..............................................................................................
1.35
Connecticut .........................................................................................
1.73
Delaware .............................................................................................
0.63
District of Columbia ..........................................................................
0.52
Florida ................................................................................................
3.72
Georgia ................................................................................................
2.10
Hawaii ................................................................................................
0.60
Idaho ...................................................................................................
1.13
Illinois ................................................................................................
3.16
Indiana ...............................................................................................
2.10
Iowa ....................................................................................................
1.36
Kansas ................................................................................................
1.12
Kentucky .............................................................................................
0.95
Louisiana ............................................................................................
1.65
Maine ..................................................................................................
1.00
Maryland ............................................................................................
1.42
Massachusetts .....................................................................................
1.15
Michigan .............................................................................................
4.93
Minnesota ...........................................................................................
3.47
Mississippi ..........................................................................................
1.32
Missouri ..............................................................................................
1.77
Montana ..............................................................................................
1.19
Nebraska .............................................................................................
1.02
Nevada ................................................................................................
0.85
New Hampshire .................................................................................
1.09
New Jersey ..........................................................................................
2.28
New Mexico .........................................................................................
1.01
New York ............................................................................................
4.90
North Carolina ...................................................................................
3.80
North Dakota ......................................................................................
0.76
Ohio .....................................................................................................
3.55
Oklahoma ............................................................................................
1.41
Oregon .................................................................................................
1.53
Pennsylvania ......................................................................................
4.41
Rhode Island ......................................................................................
0.61
South Carolina ...................................................................................
1.18
South Dakota .....................................................................................
0.82
Tennessee ............................................................................................
1.01
Texas ...................................................................................................
5.81
Utah ....................................................................................................
0.87
Vermont ..............................................................................................
0.81
Virginia ..............................................................................................
2.41
Washington .........................................................................................
2.55
West Virginia .....................................................................................
0.98
Wisconsin ............................................................................................
3.42
Wyoming .............................................................................................
0.81
American Samoa ...............................................................................
0.18
Guam ..................................................................................................
0.17
Northern Marianas ............................................................................
0.17
Puerto Rico .........................................................................................
0.81
Pacific Trust Territories ...................................................................
0.17
Virgin Islands ....................................................................................
0.31.
(b) FISCAL YEARS 1997 THROUGH 2000.—Sums au-
thorized to be appropriated pursuant to section 13 for each
of fiscal years 1997 through 2000 shall be allotted by the
Administrator in accordance with the relative needs of the
States for construction, rehabilitation, and improvement of
water supply systems and for source water quality protec-
tion programs described in section 5, as determined by the
Administrator, in consultation with the States.
(c) RESERVATION OF FUNDS FOR INDIAN TRIBES.—
(1) IN
GENERAL.—Notwithstanding subsections
(a) and (b), the Administrator shall reserve for each
fiscal year not to exceed 1.5 percent of the amount
made available to carry out section 13 for such fiscal
year for the purpose of making grants to Indian
tribes for construction, rehabilitation, and improve-
ment of water supply systems.
(2) ALASKA NATIVE VILLAGES.—In the case of a
grant under this subsection for a project in an Alaska
Native village, the Administrator is also authorized to
make grants to the State of Alaska for the benefit of
Native villages. An amount not to exceed 4 percent of
the grant amount may be used by the State of Alaska
for project management.
(d) ALLOTMENT PERIOD.—
(1) PERIOD
OF
AVAILABILITY
FOR
GRANT
AWARD.—Sums allotted to a State under this section
for a fiscal year shall be available for obligation by
the State during the fiscal year for which sums are
authorized and during the following fiscal year; ex-
cept that for sums allotted in fiscal year 1996, such
period of availability shall be fiscal years 1996
through 1998.
(2) REALLOTMENT OF UNOBLIGATED FUNDS.—
The amount of any allotment not obligated by the
State by the last day of the period of availability es-
tablished by paragraph (1) shall be immediately real-
lotted by the Administrator on the basis of the same
ratio as is applicable to sums allotted under this sec-
tion for the second fiscal year of such period. None of
the funds reallotted by the Administrator shall be re-
allotted to any State which has not obligated all sums
allotted to such State in the first fiscal year of such
period.
SEC. 10. INTENDED USE PLANS.
(a) IN GENERAL.—After providing for public review
and comment, each State establishing a water supply infra-
structure account under this Act shall annually prepare a
plan that identifies the intended uses of the amounts in the
account.
(b) CONTENTS.—An intended use plan shall include—
(1) a list of the projects to be assisted in the first
fiscal year that begins after the date of the plan, in-
cluding a description of the project, the expected terms
of financial assistance, and the size of the service
area;
(2) a determination of the priority to be given
to such projects, taking into account the relative fi-
nancial and other needs for construction, rehabilita-
tion, and improvement of water supply systems and
for source water quality protection within the bound-
aries of the State;
(3) the criteria and methods established for the
distribution of funds; and
(4) a description of the financial status of the
water supply infrastructure account.
SEC. 11. NEEDS SURVEY.
(a) IN GENERAL.—The Administrator, in cooperation
with the States and Indian tribes, shall make—
(1) a detailed estimate, biennially revised, of the
cost of needed construction, rehabilitation, and im-
provement of water supply systems in the States and
Indian tribes and of the cost of needed construction
in each of the States and Indian tribes; and
(2) a comprehensive study of the economic im-
pact on affected units of government of the costs of in-
stallation of water supply systems and parts thereof.
(b) SUBMISSION TO CONGRESS.—The Administrator
shall submit the detailed estimate and the comprehensive
study of costs under subsection (a) to Congress no later than
January 1, 1998, and January 1 of each even-numbered
year thereafter. The Administrator shall also submit rec-
ommendations for allotment of funds under section 9 to the
States based on such estimates and on such additional fac-
tors as the Administrator deems appropriate, including fi-
nancial need. Whenever the Administrator, pursuant to this
section, requests and receives an estimate of costs from a
State, the Administrator shall furnish copies of such esti-
mate together with such detailed estimate to Congress.
SEC. 12. BUY AMERICAN.
(a) SENSE OF CONGRESS.—It is the sense of Congress
that a recipient of assistance under this Act should purchase
American-made equipment and products.
(b) NOTICE.—The Administrator shall provide to each
recipient of assistance under this Act a notice describing
the sense of Congress set forth in subsection (a).
SEC. 13. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to carry out
this Act (other than sections 14 and 15)—
(1) $500,000,000 for fiscal year 1996;
(2) $750,000,000 for fiscal year 1997;
(3) $1,000,000,000 for fiscal year 1998;
(4) $1,000,000,000 for fiscal year 1999; and
(5) $1,000,000,000 for fiscal year 2000.
Such sums shall remain available until expended.
SEC. 14. TECHNICAL AND ENVIRONMENTAL FINANCING AS-
SISTANCE.
(a) TECHNICAL ASSISTANCE FOR SMALL WATER SUP-
PLY SYSTEMS.—
(1) GRANTS.—The Administrator may make
grants to States, local governments, and nonprofit or-
ganizations to provide technical assistance and train-
ing to owners and operators of small water supply
systems (including systems that utilize an alternative
treatment technology) to enable the systems to achieve
the purposes of this Act.
(2) DISSEMINATION OF INFORMATION.—The Ad-
ministrator may disseminate information to commu-
nities with respect to the planning, design, construc-
tion, and operation of water supply systems.
(3) AUTHORIZATION
OF
APPROPRIATIONS.—
There is authorized to be appropriated to carry out
this subsection $13,000,000 for each of fiscal years
1996 through 2000. Such sums shall remain available
until expended.
(b) ENVIRONMENTAL FINANCE CENTERS.—
(1) IN GENERAL.—The Administrator shall sup-
port the network of university-based Environmental
Finance Centers in providing technical assistance to
State and local officials to enable water supply sys-
tems to meet the purposes of this Act.
(2) EMPHASIS.—Assistance authorized under
this subsection shall be used by Environmental Fi-
nance Centers to increase the capabilities of State and
local officials to fund, operate, and maintain water
supply systems and source water quality protection
programs, as described in section 5 of this Act, with
greater involvement of private sector and public, non-
Federal sector participants.
(3) AUTHORIZATION
OF
APPROPRIATIONS.—
There is authorized to be appropriated to carry out
this subsection $2,000,000 for each of fiscal years
1996 through 2000. Such funds shall remain available
until expended.
SEC. 15. ADDITIONAL ASSISTANCE FOR WATER INFRA-
STRUCTURE AND WATERSHEDS.
(a) GENERAL PROGRAM.—
(1) IN GENERAL.—The Administrator may pro-
vide technical and financial assistance in the form of
grants to States (A) for the construction, rehabilita-
tion, and improvement of water supply systems, and
(B) consistent with nonpoint source management pro-
grams established under section 319 of the Federal
Water Pollution Control Act, for source water quality
protection programs to address pollutants in navi-