(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 ‘‘from such treatment;’’ and inserting 
‘‘treatment works;’’. 
SEC. 204. PILOT PROGRAM FOR ALTERNATIVE WATER 
SOURCE PROJECTS. 
Section 220(j) (33 U.S.C. 1300(j)) is amended in the 
first sentence by striking ‘‘a total of $75,000,000 for fiscal 
years 2002 through 2004’’ and inserting ‘‘from the Clean 
Water 
Trust 
Fund 
established 
by 
section 
701 
$125,000,000’’. 
SEC. 205. SEWER OVERFLOW CONTROL GRANTS. 
(a) 
ADMINISTRATIVE
REQUIREMENTS.—Section 
221(e) (33 U.S.C. 1301(e)) is amended to read as follows: 
‘‘(e) ADMINISTRATIVE REQUIREMENTS.—A project 
that receives assistance under this section shall be carried 
out subject to the same requirements as a project that 
receives assistance from a State water pollution control 
revolving fund under title VI, except to the extent that 
the Governor of the State in which the project is located
determines that a requirement of title VI is inconsistent 
with the purposes of this section.’’. 
(b) AUTHORIZATION OF APPROPRIATIONS.—The first 
sentence of section 221(f) (33 U.S.C. 1301(f)) is amended 
by striking ‘‘$750,000,000’’ and all that follows before the 
period and inserting ‘‘from the Clean Water Trust Fund 
established by section 701 $250,000,000 for each of fiscal 
years 2006 through 2010’’. 
(c) ALLOCATION
OF FUNDS.—Section 221(g) (33 
U.S.C. 1301(g)) is amended to read as follows: 
‘‘(g) ALLOCATION OF FUNDS.— 
‘‘(1) FISCAL YEAR 2006.—Subject to subsection 
(h), the Administrator shall use the amounts appro-
priated to carry out this section for fiscal year 2006 
for making grants to municipalities and municipal 
entities under subsection (a)(2) in accordance with 
the criteria set forth in subsection (b). 
‘‘(2) FISCAL YEAR 2007 AND THEREAFTER.— 
Subject to subsection (h), the Administrator shall 
use the amounts appropriated to carry out this sec-
tion for fiscal year 2007 and each fiscal year there-
after for making grants to States under subsection 
(a)(1) in accordance with a formula to be established 
by the Administrator, after providing notice and an 
opportunity for public comment, that allocates to
each State a proportional share of such amounts 
based on the total needs of the State for municipal 
combined sewer overflow controls and sanitary sewer 
overflow controls identified in the most recent survey 
conducted pursuant to section 516.’’. 
(d) REPORTS.—The first sentence of section 221(i) 
(33 U.S.C. 1301(i)) is amended by striking ‘‘2003’’ and 
inserting ‘‘2008’’. 
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’’.