I 
113TH CONGRESS 
2D SESSION 
H. R. 3862 
To amend the Federal Water Pollution Control Act to assist municipalities 
and regional sewer authorities that would experience a significant hard-
ship raising the revenue necessary to finance projects and activities 
for the construction of wastewater treatment works, and for other pur-
poses. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 14, 2014 
Mr. LATTA (for himself and Mr. WALZ) introduced the following bill; which 
was referred to the Committee on Transportation and Infrastructure 
A BILL 
To amend the Federal Water Pollution Control Act to assist 
municipalities and regional sewer authorities that would 
experience a significant hardship raising the revenue nec-
essary to finance projects and activities for the construc-
tion of wastewater treatment works, and for other pur-
poses. 
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 ‘‘Clean Water Afford-
ability Act of 2014’’. 
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SEC. 2. INTEGRATED PERMITTING PROCESS. 
(a) IN GENERAL.—Section 402(a) of the Federal 
Water Pollution Control Act (33 U.S.C. 1342(a)) is 
amended by adding at the end the following: 
‘‘(6) INTEGRATED PERMITS.— 
‘‘(A) DEFINITION
OF
PUBLICLY
OWNED 
PERMITTEE.—In this paragraph, the term ‘pub-
licly owned permittee’ means either— 
‘‘(i) a treatment works (as defined in 
section 212) that is publicly owned; or 
‘‘(ii) a municipal separate storm sewer 
system referred to in this section. 
‘‘(B) PLANNING APPROACH.—The Admin-
istrator shall establish a comprehensive and in-
tegrated planning approach to the obligations 
under this section of a publicly owned per-
mittee— 
‘‘(i) under which permit obligations 
may be implemented according to a sched-
ule that— 
‘‘(I) accounts for the financial ca-
pability of the publicly owned per-
mittee; 
‘‘(II) prioritizes permit obliga-
tions according to the most cost-effec-
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tive and environmentally beneficial 
outcomes; 
‘‘(III) accounts for the pre-
existing maintenance, operational, and 
regulatory obligations of the publicly 
owned permittee under this section; 
and 
‘‘(IV) enables the publicly owned 
permittee to implement innovative ap-
proaches to meet those obligations; 
and 
‘‘(ii) that accounts for changed cir-
cumstances in the obligations of the pub-
licly owned permittee, such as— 
‘‘(I) new innovative treatment 
approaches; 
‘‘(II) new regulatory require-
ments; and 
‘‘(III) changes in financial capa-
bility.’’. 
(b) DURATION OF PERMITS.—Section 402(b)(1)(B) 
of the Federal Water Pollution Control Act (33 U.S.C. 
1342(b)(1)(B)) is amended by inserting before the semi-
colon at the end the following: ‘‘, except that a permit with 
a term of more than 5 years but not more than 25 years 
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may be approved if the permittee has an approved inte-
grated plan established under subsection (a)(6)’’. 
SEC. 3. UPDATING OF GUIDANCE. 
(a) DEFINITIONS.—In this section, the following defi-
nitions apply: 
(1) ADMINISTRATOR.—The term ‘‘Adminis-
trator’’ means the Administrator of the Environ-
mental Protection Agency. 
(2) AFFORDABILITY.—The term ‘‘affordability’’ 
means, with respect to payment of a utility bill, a 
measure of whether an individual customer or house-
hold can pay the bill without undue hardship or un-
reasonable sacrifice in the essential lifestyle or 
spending patterns of the individual or household, as 
determined by the Administrator. 
(3) FINANCIAL CAPABILITY.—The term ‘‘finan-
cial capability’’ means the financial capability of a 
community to make investments necessary to make 
water quality-related improvements, taking into con-
sideration the criteria described in subsection 
(b)(2)(A). 
(4) GUIDANCE.—The term ‘‘guidance’’ means 
the guidance published by the Administrator entitled 
‘‘Combined Sewer Overflows—Guidance for Finan-
cial Capability Assessment and Schedule Develop-
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ment’’ and dated February 1997, as applicable to 
combined sewer overflows and sanitary sewer over-
flows. 
(b) UPDATING.— 
(1) IN GENERAL.—Not later than 1 year after 
the date of enactment of this Act, the Administrator 
shall update the guidance to ensure that the evalua-
tions by the Administrator of financial capability as-
sessment and schedule development meet the criteria 
described in paragraph (2). 
(2) CRITERIA.—The criteria described in this 
paragraph are that, under the updated guidance— 
(A) in assessing the financial capability of 
a community— 
(i) greater emphasis should be placed 
on local economic conditions; 
(ii) for regional systems, consideration 
should be given to the economic conditions 
of political jurisdictions and significant de-
mographic groups within each region; 
(iii) prescriptive formulas for use in 
calculating financial capability and thresh-
olds for expenditure should not be consid-
ered to be the only indicator of the finan-
cial capability of a community; 
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(iv) 
site-specific 
local 
conditions 
should be taken into consideration in ana-
lyzing financial capability; 
(v) a single measure of financial capa-
bility or affordability (such as median 
household income) should be viewed in the 
context of other economic measures, rather 
than as a threshold to be achieved; and 
(vi)(I) consideration should be given 
to the economic outlook of a community, 
including the potential impact of program 
requirements over time, in the development 
of implementation schedules; and 
(II) the assessment should take into 
consideration other essential community 
investments relating to water quality im-
provements; 
(B) with respect to the timing of imple-
mentation of water quality-related improve-
ments— 
(i) environmental improvement imple-
mentation schedules should be structured 
to mitigate the potential adverse impact on 
distressed populations resulting from the 
costs of the improvements; 
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(ii) implementation schedules should 
reflect local community financial conditions 
and economic impacts; 
(iii) implementation schedules should 
allow permittees up to 30 years to imple-
ment water quality-related improvements 
in appropriate cases in which the cost of 
implementing the improvements places a 
high financial burden on the permittee; 
and 
(iv) existing implementation schedules 
should be modified in appropriate cases 
taking into consideration the criteria set 
forth in this subparagraph; 
(C) with respect to implementation— 
(i) a determination of local financial 
capability may be achieved through an 
evaluation of an array of factors the rel-
ative importance of which may vary across 
regions and localities; and 
(ii) 
an 
appropriate 
methodology 
should give consideration to such various 
factors as are appropriate to recognize the 
prevailing and projected economic concerns 
in a community; and 
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(D) the residential indicator should be re-
vised to include— 
(i) a consideration of costs imposed 
upon ratepayers for essential utilities; 
(ii) increased consideration and quan-
tification of local community-imposed costs 
in regional systems; 
(iii) a mechanism to assess impacts on 
communities with disparate economic con-
ditions throughout the entire service area 
of a utility; 
(iv) a consideration of the industrial 
and population trends of a community; 
(v) recognition that— 
(I) the median household income 
of a service area reflects a numerical 
median rather than the distribution of 
incomes within the service area; and 
(II) more representative methods 
of determining affordability, such as 
shelter costs, essential utility pay-
ments, State affordability criteria, and 
State and local tax efforts, should be 
considered; 
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(vi) a consideration of low-income 
ratepayer percentages; and 
(vii) impacts relating to program de-
livery, such as water quality infrastructure 
market saturation and program manage-
ment. 
(3) IMPLEMENTATION.—The updated guidance 
should indicate that, in a case in which a previously 
approved long-term control plan or associated en-
forceable agreement does not prohibit modification 
of the plan or terms of the agreement (including fi-
nancial capability considerations), and all parties are 
in agreement that a change is needed or that the 
plan or agreement does not prohibit reopening to ad-
dress changes in the economic or financial status of 
the community since the effective date of the plan or 
agreement, reconsideration and modification of fi-
nancial capability determinations and implementa-
tion schedules based on the criteria described in 
paragraph (2) is appropriate. 
(4) APPLICABILITY.—The Administrator shall 
apply the updated guidance, including the criteria 
described in paragraph (2), to each determination 
and analysis of affordability, financial capability, or 
widespread and substantial economic impact related 
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to implementation of a program under the Federal 
Water Pollution Control Act (33 U.S.C. 1251 et 
seq.). 
(c) PUBLICATION AND SUBMISSION.—Upon comple-
tion of the updating of guidance under subsection (b), the 
Administrator shall publish in the Federal Register and 
submit to the Committee on Environment and Public 
Works of the Senate and the Committee on Transpor-
tation and Infrastructure of the House of Representatives 
the updated guidance. 
SEC. 4. CAPITALIZATION GRANT AGREEMENTS. 
Section 602(b) of the Federal Water Pollution Con-
trol Act (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 ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(11) 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, 2015, 
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-
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ority list established under section 603(g), to the ex-
tent that there are sufficient applications for such 
assistance.’’. 
SEC. 5. WATER POLLUTION CONTROL REVOLVING LOAN 
FUNDS. 
(a) 
EXTENDED
REPAYMENT
PERIOD.—Section 
603(d)(1) of the Federal Water Pollution Control Act (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’’. 
(b) ADDITIONAL SUBSIDIZATION.—Section 603 of 
such Act (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 inter-
municipal, interstate, or State agency under sub-
section (d), the State may provide additional sub-
sidization, including forgiveness of principal, nega-
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tive interest loans, and grants to benefit a munici-
pality that— 
‘‘(A) meets the State’s affordability criteria 
established under paragraph (2); or 
‘‘(B) does not meet the State’s afford-
ability criteria if the recipient— 
‘‘(i) seeks additional subsidization to 
benefit individual ratepayers in the resi-
dential user rate class; and 
‘‘(ii) demonstrates to the State that 
such ratepayers will experience a signifi-
cant hardship from the increase in rates 
necessary to finance the project or activity 
for which assistance is sought. 
‘‘(2) AFFORDABILITY CRITERIA.— 
‘‘(A) ESTABLISHMENT.—On or before Sep-
tember 30, 2015, 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 
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trends, and other data determined relevant by 
the State, including whether the project or ac-
tivity is to be carried out in an economically 
distressed area, as described in section 301 of 
the Public Works and Economic Development 
Act of 1965 (42 U.S.C. 3161). 
‘‘(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) USE
OF
CAPITALIZATION
GRANTS.—A 
State shall use not less than 20 percent but not 
more than 30 percent of the amount of the capital-
ization grants received by the State under this title 
in fiscal years beginning after September 30, 2015, 
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to provide additional subsidization to eligible recipi-
ents under paragraph (1).’’. 
Æ 
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