SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) IN GENERAL.—This Act may be cited as the 
‘‘Water Quality Financing Act of 2007’’. 
(b) TABLE OF CONTENTS.—
Sec. 1. Short title; table of contents. 
Sec. 2. Amendment of Federal Water Pollution Control Act. 
TITLE I—TECHNICAL AND MANAGEMENT ASSISTANCE 
Sec. 101. Technical assistance. 
Sec. 102. State management assistance. 
Sec. 103. Watershed pilot projects. 
TITLE II—CONSTRUCTION OF TREATMENT WORKS 
Sec. 201. Sewage collection systems. 
Sec. 202. Treatment works defined. 
Sec. 203. Policy on cost effectiveness. 
TITLE III—STATE WATER POLLUTION CONTROL REVOLVING 
FUNDS 
Sec. 301. General authority for capitalization grants. 
Sec. 302. Capitalization grant agreements. 
Sec. 303. Water pollution control revolving loan funds. 
Sec. 304. Allotment of funds. 
Sec. 305. Intended use plan. 
Sec. 306. Annual reports. 
Sec. 307. Technical assistance. 
Sec. 308. Authorization of appropriations. 
TITLE IV—GENERAL PROVISIONS 
Sec. 401. Definition of treatment works. 
Sec. 402. Funding for Indian programs. 
TITLE V—STUDIES 
Sec. 501. Study of long-term, sustainable, clean water funding. 
Sec. 502. Feasibility study of supplemental and alternative clean water funding 
mechanisms. 
Sec. 503. Great Lakes water quality. 
TITLE VI—TONNAGE DUTIES 
Sec. 601. Tonnage duties. 
TITLE VII—SECURE MARITIME AND VESSEL WORKFORCE 
Sec. 701. Prohibition of issuance of transportation security cards to convicted 
felons.
SEC. 2. AMENDMENT OF FEDERAL WATER POLLUTION CON-
TROL ACT. 
Except as otherwise expressly provided, whenever in 
this Act an amendment or repeal is expressed in terms 
of an amendment to, or repeal of, a section or other provi-
sion, 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.). 
TITLE I—TECHNICAL AND 
MANAGEMENT ASSISTANCE 
SEC. 101. TECHNICAL ASSISTANCE. 
(a) TECHNICAL ASSISTANCE FOR RURAL AND SMALL 
TREATMENT
WORKS.—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 para-
graph (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 for the purpose 
of assisting, in consultation with the State in 
which the assistance is provided, such munici-
palities in the planning, developing, and acquisi-
tion of financing for eligible projects described 
in section 603(c); 
‘‘(B) to provide technical assistance and 
training for rural and small 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 re-
quirements of this Act; and 
‘‘(C) to disseminate information to rural 
and small municipalities and municipalities that 
meet the affordability criteria established under 
section 603(i)(2) by the State in which the mu-
nicipality is located with respect to planning, 
design, construction, and operation of publicly 
owned treatment works and decentralized 
wastewater treatment systems.’’. 
(b) AUTHORIZATION OF APPROPRIATIONS.—Section 
104(u) (33 U.S.C. 1254(u)) is amended—
(1) by striking ‘‘and (6)’’ and inserting ‘‘(6)’’; 
and 
(2) by inserting before the period at the end the 
following: ‘‘; and (7) not to exceed $75,000,000 for 
each of fiscal years 2008 through 2012 for carrying 
out subsections (b)(3) and (b)(8), except that not
less than 20 percent of the amounts appropriated 
pursuant to this paragraph in a fiscal year shall be 
used for carrying out subsection (b)(8)’’. 
(c) 
SMALL
FLOWS
CLEARINGHOUSE.—Section 
104(q)(4) (33 U.S.C. 1254(q)(4)) is amended—
(1) 
in 
the 
first 
sentence 
by 
striking 
‘‘$1,000,000’’ and inserting ‘‘$3,000,000’’; and 
(2) in the second sentence by striking ‘‘1986’’ 
and inserting ‘‘2009’’. 
(d) COMPETITIVE
PROCEDURES
FOR
AWARDING 
GRANTS.—Section 104 (33 U.S.C. 1254(b)) is amended 
by adding at the end the following: 
‘‘(w) COMPETITIVE PROCEDURES
FOR AWARDING 
GRANTS.—The Administrator shall establish procedures 
that, to the maximum extent practicable, promote com-
petition and openness in the award of grants to nonprofit 
private agencies, institutions, and organizations under this 
section.’’. 
SEC. 102. STATE MANAGEMENT ASSISTANCE. 
Section 106(a) (33 U.S.C. 1256(a)) is amended—
(1) by striking ‘‘and’’ at the end of paragraph 
(1); 
(2) by striking the semicolon at the end of 
paragraph (2) and inserting ‘‘; and’’; and
(3) by inserting after paragraph (2) the fol-
lowing: 
‘‘(3) such sums as may be necessary for each 
of 
fiscal 
years 
1991 
through 
2007, 
and 
$300,000,000 for each of fiscal years 2008 through 
2012;’’. 
SEC. 103. WATERSHED PILOT PROJECTS. 
(a) PILOT
PROJECTS.—Section 122 (33 U.S.C. 
1274) is amended—
(1) in the section heading by striking ‘‘WET 
WEATHER’’; and 
(2) in subsection (a)—
(A) in the matter preceding paragraph (1) 
by striking ‘‘wet weather discharge’’; 
(B) in paragraph (2) by striking ‘‘in reduc-
ing such pollutants’’ and all that follows before 
the period at the end and inserting ‘‘to manage, 
reduce, treat, or reuse municipal stormwater, 
including low-impact development technologies’’; 
and 
(C) by adding at the end the following: 
‘‘(3) WATERSHED PARTNERSHIPS.—Efforts of 
municipalities and property owners to demonstrate 
cooperative ways to address nonpoint sources of pol-
lution to reduce adverse impacts on water quality.
‘‘(4) INTEGRATED WATER RESOURCE PLAN.—
The development of an integrated water resource 
plan for the coordinated management and protection 
of surface water, ground water, and stormwater re-
sources on a watershed or subwatershed basis to 
meet the objectives, goals, and policies of this Act.’’. 
(b) AUTHORIZATION OF APPROPRIATIONS.—Section 
122(c)(1) is amended by striking ‘‘for fiscal year 2004’’ 
and inserting ‘‘for each of fiscal years 2004 through 
2012’’. 
(c) REPORT
TO
CONGRESS.—Section 122(d) is 
amended by striking ‘‘5 years’’ and inserting ‘‘10 years’’. 
TITLE II—CONSTRUCTION OF 
TREATMENT WORKS 
SEC. 201. SEWAGE COLLECTION SYSTEMS. 
Section 211 (33 U.S.C. 1291) is amended—
(1) by striking the section designation and all 
that follows through ‘‘(a) No’’ and inserting the fol-
lowing: 
‘‘SEC. 211. SEWAGE COLLECTION SYSTEMS. 
‘‘(a) IN GENERAL.—No’’; 
(2) in subsection (b) by inserting ‘‘POPULATION 
DENSITY.—’’ after ‘‘(b)’’; and 
(3) by striking subsection (c) and inserting the 
following:
‘‘(c) EXCEPTIONS.—
‘‘(1) REPLACEMENT AND MAJOR REHABILITA-
TION.—Notwithstanding the requirement of sub-
section (a)(1) concerning the existence of a collection 
system as a condition of eligibility, a project for re-
placement or major rehabilitation of a collection sys-
tem existing on January 1, 2007, shall be eligible for 
a grant under this title if the project otherwise 
meets the requirements of subsection (a)(1) and 
meets the requirement of paragraph (3). 
‘‘(2) NEW SYSTEMS.—Notwithstanding the re-
quirement of subsection (a)(2) concerning the exist-
ence of a community as a condition of eligibility, a 
project for a new collection system to serve a com-
munity existing on January 1, 2007, shall be eligible 
for a grant under this title if the project otherwise 
meets the requirements of subsection (a)(2) and 
meets the requirement of paragraph (3). 
‘‘(3) REQUIREMENT.—A project meets the re-
quirement of this paragraph if the purpose of the 
project is to accomplish the objectives, goals, and 
policies of this Act by addressing an adverse envi-
ronmental condition existing on the date of enact-
ment of this paragraph.’’.
SEC. 202. TREATMENT WORKS DEFINED. 
Section 212(2)(A) (33 U.S.C. 1292(2)(A)) is amend-
ed—
(1) by striking ‘‘any works, including site’’; 
(2) by striking ‘‘is used for ultimate’’ and in-
serting ‘‘will be used for ultimate’’; and 
(3) by inserting before the period at the end the 
following: ‘‘and acquisition of other lands, and inter-
ests in lands, which are necessary for construction’’. 
SEC. 203. POLICY ON COST EFFECTIVENESS. 
Section 218(a) (33 U.S.C. 1298(a)) is amended by 
striking ‘‘combination of devices and systems’’ and all that 
follows through the period at the end and inserting ‘‘treat-
ment works that meets the requirements of this Act. The 
system may include water efficiency measures and de-
vices.’’. 
TITLE III—STATE WATER POLLU-
TION CONTROL REVOLVING 
FUNDS 
SEC. 301. 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. 302. CAPITALIZATION GRANT AGREEMENTS. 
(a) REPORTING INFRASTRUCTURE ASSETS.—Section 
602(b)(9) (33 U.S.C. 1382(b)(9)) is amended by striking 
‘‘standards’’ and inserting ‘‘standards, including stand-
ards relating to the reporting of infrastructure assets’’. 
(b) ADDITIONAL 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 para-
graph (10) and inserting a semicolon; and 
(3) by adding at the end the following: 
‘‘(11) the State will establish, maintain, invest, 
and credit the fund with repayments, such that the 
fund balance will be available in perpetuity for pro-
viding financial assistance in accordance with this 
title; 
‘‘(12) any fees charged by the State to recipi-
ents of assistance will be used for the purpose of fi-
nancing the cost of administering the fund or fi-
nancing projects or activities eligible for assistance 
from the fund;
‘‘(13) beginning in fiscal year 2009, the State 
will include as a condition of providing assistance to 
a municipality or intermunicipal, interstate, or State 
agency that the recipient of such assistance certify, 
in a manner determined by the Governor of the 
State, that the recipient—
‘‘(A) has studied and evaluated the cost 
and effectiveness of innovative and alternative 
processes, materials, techniques, and tech-
nologies for carrying out the proposed project 
or activity for which assistance is sought under 
this title, and has selected, to the extent prac-
ticable, a project or activity that may result in 
greater environmental benefits or equivalent en-
vironmental benefits when compared to stand-
ard processes, materials, techniques, and tech-
nologies and more efficiently uses energy and 
natural and financial resources; and 
‘‘(B) has considered, to the maximum ex-
tent practical and as determined appropriate by 
the recipient, the costs and effectiveness of 
other design, management, and financing ap-
proaches for carrying out a project or activity 
for which assistance is sought under this title, 
taking into account the cost of operating and
maintaining the project or activity over its life, 
as well as the cost of constructing the project 
or activity; 
‘‘(14) the State will use at least 15 percent of 
the amount of each capitalization grant received by 
the State under this title after September 30, 2007, 
to provide assistance to municipalities of fewer than 
10,000 individuals that meet the affordability cri-
teria established by the State under section 
603(i)(2) for activities included on the State’s pri-
ority list established under section 603(g), to the ex-
tent that there are sufficient applications for such 
assistance; 
‘‘(15) treatment works eligible under section 
603(c)(1) which will be constructed in whole or in 
part with funds made available under section 
205(m) or by a State water pollution control revolv-
ing fund under this title, or both, will meet the re-
quirements of, or otherwise be treated (as deter-
mined by the Governor of the State) under sections 
204(a)(6), 204(b)(1), 211, 218, and 511(c)(1) in the 
same manner as treatment works constructed with 
assistance under title II of this Act; 
‘‘(16) a contract to be carried out using funds 
directly made available by a capitalization grant
under this title for program management, construc-
tion management, feasibility studies, preliminary en-
gineering, design, engineering, surveying, mapping, 
or architectural related services shall be negotiated 
in the same manner as a contract for architectural 
and engineering services is negotiated under chapter 
11 of title 40, United States Code, or an equivalent 
State qualifications-based requirement (as deter-
mined by the Governor of the State); and 
‘‘(17) 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 au-
thorized 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.’’. 
SEC. 303. WATER POLLUTION CONTROL REVOLVING LOAN 
FUNDS. 
(a) PROJECTS AND ACTIVITIES ELIGIBLE FOR AS-
SISTANCE.—Section 603(c) (33 U.S.C. 1383(c)) is amend-
ed to read as follows: 
‘‘(c) PROJECTS AND ACTIVITIES ELIGIBLE FOR AS-
SISTANCE.—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 pub-
licly owned treatment works; 
‘‘(2) for the implementation of a management 
program established under section 319; 
‘‘(3) for development and implementation of a 
conservation and management plan under section 
320; 
‘‘(4) for the implementation of lake protection 
programs and projects under section 314; 
‘‘(5) for repair or replacement of decentralized 
wastewater treatment systems that treat domestic 
sewage; 
‘‘(6) for measures to manage, reduce, treat, or 
reuse municipal stormwater; 
‘‘(7) to any municipality or intermunicipal, 
interstate, or State agency for measures to reduce 
the demand for publicly owned treatment works ca-
pacity through water conservation, efficiency, or 
reuse; 
‘‘(8) for measures to increase the security of 
publicly owned treatment works; and
‘‘(9) for the development and implementation of 
watershed projects meeting the criteria set forth in 
section 122.’’. 
(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 insert-
ing ‘‘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 subpara-
graph (C); 
(2) by inserting ‘‘and’’ at the end of subpara-
graph (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 a loan 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 treat-
ment works; 
‘‘(ii) an evaluation of the condition 
and performance of inventoried assets or 
asset groupings; and 
‘‘(iii) a plan for maintaining, repair-
ing, and, as necessary, replacing that por-
tion of the treatment works and a plan for 
funding such activities;’’. 
(d) ADMINISTRATIVE EXPENSES.—Section 603(d)(7) 
(33 U.S.C. 1383(d)(7)) is amended by inserting before the 
period at the end the following: ‘‘, $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) TECHNICAL
AND PLANNING ASSISTANCE
FOR 
SMALL SYSTEMS.—Section 603(d) (33 U.S.C. 1383(d)) is 
amended—
(1) by striking ‘‘and’’ at the end of paragraph 
(6); 
(2) by striking the period at the end of para-
graph (7) and inserting ‘‘; and’’; and 
(3) by adding at the end the following:
‘‘(8) to provide owners and operators of treat-
ment works that serve a population of 10,000 or 
fewer with technical and planning assistance and as-
sistance in financial management, user fee analysis, 
budgeting, capital improvement planning, facility op-
eration and maintenance, equipment replacement, 
repair schedules, and other activities to improve 
wastewater treatment plant management and oper-
ations; except that such amounts shall not exceed 2 
percent of grant awards to such fund under this 
title.’’. 
(f) ADDITIONAL SUBSIDIZATION.—Section 603 (33 
U.S.C. 1383) is amended by adding at the end the fol-
lowing: 
‘‘(i) ADDITIONAL SUBSIDIZATION.—
‘‘(1) IN
GENERAL.—In any case in which a 
State provides assistance to a municipality or inter-
municipal, interstate, or State agency under sub-
section (d), the State may provide additional sub-
sidization, 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 afford-
ability criteria if the recipient—
‘‘(I) seeks additional subsidiza-
tion 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 as-
sistance 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 appro-
priate method) to such ratepayers; or 
‘‘(B) to implement an innovative or alter-
native process, material, technique, or tech-
nology (including low-impact technologies, non-
structural 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, tech-
nique, or technology. 
‘‘(2) AFFORDABILITY CRITERIA.—
‘‘(A) ESTABLISHMENT.—On or before Sep-
tember 30, 2008, 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 nec-
essary to finance a project or activity eligible 
for assistance under section 603(c)(1) if addi-
tional subsidization is not provided. Such cri-
teria 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, afford-
ability criteria that meet the requirements of 
subparagraph (A), the State may use the cri-
teria for the purposes of this subsection. For 
purposes of this Act, any such criteria shall be 
treated as affordability criteria established 
under this paragraph.
‘‘(C) INFORMATION TO ASSIST STATES.—
The Administrator may publish information to 
assist States in establishing affordability cri-
teria under subparagraph (A). 
‘‘(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) SET-ASIDE.—
‘‘(A) IN GENERAL.—In any fiscal year in 
which the Administrator has available for obli-
gation more than $1,000,000,000 for the pur-
poses of this title, a State shall provide addi-
tional subsidization under this subsection in the 
amount specified in subparagraph (B) to eligi-
ble entities described in paragraph (1) for 
projects and activities identified in the State’s 
intended use plan prepared under section 
606(c) to the extent that there are sufficient 
applications for such assistance. 
‘‘(B) AMOUNT.—In a fiscal year described 
in subparagraph (A), a State shall set aside for 
purposes of subparagraph (A) an amount not 
less than 25 percent of the difference be-
tween—
‘‘(i) the total amount that would have 
been allotted to the State under section 
604 for such fiscal year if the amount 
available to the Administrator for obliga-
tion under this title for such fiscal year 
had been equal to $1,000,000,000; and 
‘‘(ii) the total amount allotted to the 
State under section 604 for such fiscal 
year. 
‘‘(5) LIMITATION.—The total amount of addi-
tional subsidization provided under this subsection 
by a State may not exceed 30 percent of the total 
amount of capitalization grants received by the State 
under this title in fiscal years beginning after Sep-
tember 30, 2007.’’. 
SEC. 304. ALLOTMENT OF FUNDS. 
(a) IN
GENERAL.—Section 604(a) (33 U.S.C. 
1384(a)) is amended to read as follows: 
‘‘(a) ALLOTMENTS.—
‘‘(1) FISCAL YEARS 2008 AND 2009.—Sums ap-
propriated to carry out this title for each of fiscal 
years 2008 and 2009 shall be allotted by the Admin-
istrator in accordance with the formula used to allot 
sums appropriated to carry out this title for fiscal 
year 2007.
‘‘(2) FISCAL YEAR 2010 AND THEREAFTER.—
Sums appropriated to carry out this title for fiscal 
year 2010 and each fiscal year thereafter shall be al-
lotted by the Administrator as follows: 
‘‘(A) 
Amounts 
that 
do 
not 
exceed 
$1,350,000,000 shall be allotted in accordance 
with the formula described in paragraph (1). 
‘‘(B) Amounts that exceed $1,350,000,000 
shall be allotted in accordance with the formula 
developed by the Administrator under sub-
section (d).’’. 
(b) PLANNING ASSISTANCE.—Section 604(b) (33 
U.S.C. 1384(b)) is amended by striking ‘‘1 percent’’ and 
inserting ‘‘2 percent’’. 
(c) FORMULA.—Section 604 (33 U.S.C. 1384) is 
amended by adding at the end the following: 
‘‘(d) 
FORMULA
BASED
ON
WATER
QUALITY 
NEEDS.—Not later than September 30, 2009, and after 
providing notice and an opportunity for public comment, 
the Administrator shall publish an allotment formula 
based on water quality needs in accordance with the most 
recent survey of needs developed by the Administrator 
under section 516(b).’’.
SEC. 305. INTENDED USE PLAN. 
(a) INTEGRATED PRIORITY LIST.—Section 603(g) 
(33 U.S.C. 1383(g)) is amended to read as follows: 
‘‘(g) PRIORITY LIST.—
‘‘(1) IN GENERAL.—For fiscal year 2009 and 
each fiscal year thereafter, a State shall establish or 
update a list of projects and activities for which as-
sistance is sought from the State’s water pollution 
control revolving fund. Such projects and activities 
shall be listed in priority order based on the method-
ology established under paragraph (2). The State 
may provide financial assistance from the State’s 
water pollution control revolving fund only with re-
spect to a project or activity included on such list. 
In the case of projects and activities eligible for as-
sistance under section 603(c)(2), the State may in-
clude a category or subcategory of nonpoint sources 
of pollution on such list in lieu of a specific project 
or activity. 
‘‘(2) METHODOLOGY.—
‘‘(A) IN GENERAL.—Not later than 1 year 
after the date of enactment of this paragraph, 
and after providing notice and opportunity for 
public comment, each State (acting through the 
State’s water quality management agency and 
other appropriate agencies of the State) shall
establish a methodology for developing a pri-
ority list under paragraph (1). 
‘‘(B) PRIORITY
FOR
PROJECTS
AND
AC-
TIVITIES
THAT
ACHIEVE
GREATEST
WATER 
QUALITY
IMPROVEMENT.—In developing the 
methodology, the State shall seek to achieve the 
greatest degree of water quality improvement, 
taking into consideration the requirements of 
section 602(b)(5) and section 603(i)(3), wheth-
er such water quality improvements would be 
realized without assistance under this title, and 
whether the proposed projects and activities 
would address water quality impairments asso-
ciated with existing treatment works. 
‘‘(C) 
CONSIDERATIONS
IN
SELECTING 
PROJECTS
AND
ACTIVITIES.—In determining 
which projects and activities will achieve the 
greatest degree of water quality improvement, 
the State shall consider—
‘‘(i) information developed by the 
State under sections 303(d) and 305(b); 
‘‘(ii) the State’s continuing planning 
process developed under section 303(e); 
‘‘(iii) the State’s management pro-
gram developed under section 319; and
‘‘(iv) conservation and management 
plans developed under section 320. 
‘‘(D) NONPOINT SOURCES.—For categories 
or subcategories of nonpoint sources of pollu-
tion that a State may include on its priority list 
under paragraph (1), the State may consider 
the cumulative water quality improvements as-
sociated with projects or activities in such cat-
egories or subcategories. 
‘‘(E) EXISTING
METHODOLOGIES.—If a 
State has previously developed, after providing 
notice and an opportunity for public comment, 
a methodology that meets the requirements of 
this paragraph, the State may use the method-
ology for the purposes of this subsection.’’. 
(b) INTENDED USE PLAN.—Section 606(c) (33 
U.S.C. 1386(c)) is amended—
(1) in the matter preceding paragraph (1) by 
striking ‘‘each State shall annually prepare’’ and in-
serting ‘‘each State (acting through the State’s 
water quality management agency and other appro-
priate agencies of the State) shall annually prepare 
and publish’’; 
(2) by striking paragraph (1) and inserting the 
following:
‘‘(1) the State’s priority list developed under 
section 603(g);’’; 
(3) in paragraph (4)—
(A) by striking ‘‘and (6)’’ and inserting 
‘‘(6), (15), and (17)’’; and 
(B) by striking ‘‘and’’ at the end; 
(4) by striking the period at the end of para-
graph (5) and inserting ‘‘; and’’; and 
(5) by adding at the end the following: 
‘‘(6) if the State does not fund projects and ac-
tivities in the order of the priority established under 
section 603(g), an explanation of why such a change 
in order is appropriate.’’. 
(c) TRANSITIONAL PROVISION.—Before completion 
of a priority list based on a methodology established under 
section 603(g) of the Federal Water Pollution Control Act 
(as amended by this section), a State shall continue to 
comply with the requirements of sections 603(g) and 
606(c) of such Act, as in effect on the day before the date 
of enactment of this Act. 
SEC. 306. ANNUAL REPORTS. 
Section 606(d) (33 U.S.C. 1386(d)) is amended by 
inserting ‘‘the eligible purpose under section 603(c) for 
which the assistance is provided,’’ after ‘‘loan amounts,’’.