I 113th CONGRESS 2d Session H. R. 5534 IN THE HOUSE OF REPRESENTATIVES September 18, 2014 Mr. Tonko (for himself and Mr. Waxman ) introduced the following bill; which was referred to the Committee on Energy and Commerce A BILL To amend the Safe Drinking Water Act to increase assistance for States, water systems, and disadvantaged communities; to encourage good financial and environmental management of water systems; to strengthen the Environmental Protection Agency’s ability to enforce the requirements of the Act; and for other purposes.

1. Short title; table of contents; references (a) Short title This Act may be cited as the Assistance, Quality, and Affordability Act of 2014 . (b) Table of contents The table of contents of this Act is as follows: Sec. 1. Short title; table of contents; references. Sec. 2. Technical assistance for small public water systems. Sec. 3. Prevailing wages. Sec. 4. Use of funds. Sec. 5. Requirements for use of American materials. Sec. 6. Data on variances, exemptions, and persistent violations. Sec. 7. Assistance for restructuring. Sec. 8. Priority and weight of applications. Sec. 9. Disadvantaged communities. Sec. 10. Administration of State loan funds. Sec. 11. State revolving loan funds for American Samoa, Northern Mariana Islands, Guam, and the Virgin Islands. Sec. 12. Authorization of appropriations. Sec. 13. Affordability of new standards. Sec. 14. Focus on lifecycle costs. Sec. 15. Enforcement. Sec. 16. Presence of pharmaceuticals and personal care products in sources of drinking water. Sec. 17. Electronic reporting of compliance monitoring data to the Administrator. Sec. 18. Best practices for administration of State revolving loan fund programs. Sec. 19. Water loss and leak control technology. (c) References Except as otherwise specified, whenever in this Act an amendment is expressed in terms of an amendment to a section or other provision, the reference shall be considered to be made to a section or other provision of the Safe Drinking Water Act ( 42 U.S.C. 300f et seq. ). 2. Technical assistance for small public water systems Subsection (e) of section 1442 ( 42 U.S.C. 300j–1(e) ) is amended to read as follows: (e) Technical Assistance (1) In general The Administrator, directly or through grants or cooperative agreements with nonprofit organizations, may provide technical assistance to small public water systems to enable such systems to achieve and maintain compliance with applicable national primary drinking water regulations. (2) Types of assistance Technical assistance under paragraph (1) may include onsite technical assistance and compliance assistance; circuit-rider and multi-State regional technical assistance programs; training; assistance with implementing source water protection programs; engineering assistance provided without cost to the system through volunteer programs or educational programs; assistance with increasing water or energy efficiency; assistance with designing, installing, or operating sustainable energy infrastructure to produce or capture sustainable energy on site or through water transport; assistance with developing technical, financial, and managerial capacity; assistance with long-term infrastructure planning; assistance with applying for funds from a State loan fund under section 1452; and assistance with implementation of monitoring plans, rules, regulations, and water security enhancements. (3) Priority In providing assistance under this subsection, the Administrator shall give priority to assistance that will promote compliance with national primary drinking water standards, public health protection, and long-term sustainability of small public water systems. In awarding grants and cooperative assistance under paragraph (1) to nonprofit organizations, the Administrator shall (subject to the preceding sentence) give greater weight to nonprofit organizations that, as determined by the Administrator, are most qualified and most effective and that, as determined by the Administrator using information where available, are providing the types of technical assistance that are preferred by small public water systems. (4) Competitive procedures It is the presumption of Congress that any award of assistance under this subsection will be awarded using competitive procedures based on merit. If assistance is awarded under this subsection using procedures other than competitive procedures, the Administrator shall submit to the Congress, within 90 days of the award decision, a report explaining why competitive procedures were not used. (5) Funding (A) Authorization of appropriations There is authorized to be appropriated to carry out this subsection $20,000,000 for each of fiscal years 2015 through 2019. (B) Prohibition on earmarks No funds made available under this subsection may be used to carry out a provision or report language included primarily at the request of a Member, Delegate, Resident Commissioner, or Senator providing, authorizing, or recommending a specific amount of discretionary budget authority, credit authority, or other spending authority for a contract, loan, loan guarantee, grant, loan authority, or other expenditure with or to an entity, or targeted to a specific State, locality, or congressional district, other than through a statutory or administrative formula-driven or competitive award process. (C) 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. (D) Indian tribes Of the total amount made available under this section for each fiscal year, 3 percent shall be used for technical assistance to public water systems owned or operated by Indian Tribes. . 3. Prevailing wages Subsection (e) of section 1450 ( 42 U.S.C. 300j–9 ) is amended to read as follows: (e) Labor Standards (1) In general The Administrator shall take such action as the Administrator determines to be necessary to ensure that each laborer and mechanic employed by a contractor or subcontractor in connection with a construction project financed, in whole or in part, by a grant, loan, loan guarantee, refinancing, or any other form of financial assistance provided under this title (including assistance provided by a State loan fund established under section 1452) is paid wages at a rate of not less than the wages prevailing for the same type of work on similar construction in the immediate locality, as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code. (2) Authority of Secretary of Labor With respect to the labor standards specified in this subsection, the Secretary of Labor shall have the authority and functions established in Reorganization Plan Numbered 14 of 1950 (5 U.S.C. App.) and section 3145 of title 40, United States Code. . 4. Use of funds Section 1452(a)(2) ( 42 U.S.C. 300j–12(a)(2) ) is amended— (1) by striking Except as otherwise and inserting the following: (A) In general Except as otherwise ; (2) by striking Financial assistance under this section and inserting the following: (B) Permissible expenditures Financial assistance under this section ; (3) by striking The funds may also be used and inserting the following: (D) Certain loans Financial assistance under this section may also be used ; (4) by striking The funds shall not be used and inserting the following: (E) Limitation Financial assistance under this section shall not be used ; (5) by striking Of the amount credited and inserting the following: (F) Set-aside Of the amount credited ; (6) in subparagraph (B) (as designated by paragraph (2)) by striking (not and inserting (including expenditures for planning, design, siting, and associated preconstruction activities, for replacing or rehabilitating aging treatment, storage, or distribution facilities of public water systems, or for producing or capturing sustainable energy on site or through the transportation of water through the public water system, but not ; and (7) by inserting after such subparagraph (B) the following: (C) Sale of bonds If a State issues revenue or general obligation bonds to provide all or part of the State contribution required by subsection (e), and the proceeds of the sale of such bonds will be deposited into the State loan fund— (i) financial assistance made available under this section may be used by the State as security for payment of the principal and interest on such bonds; and (ii) interest earnings of the State loan fund may be used by the State as revenue for payment of the principal and interest on such bonds. . 5. Requirements for use of American materials Section 1452(a) ( 42 U.S.C. 300j–12(a) ) is amended by adding at the end the following new paragraph: (4) Requirements for use of American materials (A) In general Notwithstanding any other provision of law, none of the funds made available by a State loan fund as authorized under this section may be used for a project for the construction, alteration, maintenance, or repair of a public water system unless all of the iron and steel products used in such project are produced in the United States. (B) Application Subparagraph (A) shall not apply in any case in which the Administrator (in consultation with the Governor of the State) finds that— (i) applying subparagraph (A) would be inconsistent with the public interest; (ii) iron and steel products are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality; or (iii) inclusion of iron and steel products produced in the United States will increase the cost of the overall project by more than 25 percent. (C) Waiver If the Administrator receives a request for a waiver under this section, the Administrator shall— (i) make available to the public, on an informal basis, a copy of the request and information available to the Administrator concerning the request; (ii) make the request and accompanying information available by electronic means, including on the official public Internet site of the Environmental Protection Agency; and (iii) allow for informal public input on the request for at least 15 days prior to making a finding based on the request. (D) Consistency with international agreements This paragraph shall be applied in a manner consistent with United States obligations under international agreements. (E) Definition of iron and steel products In this paragraph, the term iron and steel products means the following products made primarily of iron or steel: lined or unlined pipes and fittings, manhole covers and other municipal castings, hydrants, tanks, flanges, pipe clamps and restraints, valves, structural steel, reinforced precast concrete, and construction materials. . 6. Data on variances, exemptions, and persistent violations Section 1452(b)(2) ( 42 U.S.C. 300j–12(b)(2) ) is amended— (1) in subparagraph (B), by striking and at the end; (2) in subparagraph (C), by striking the period at the end and inserting ; and ; and (3) by adding at the end the following: (D) a list of all water systems within the State that have in effect an exemption or variance for any national primary drinking water regulation or that are in persistent violation of the requirements for any maximum contaminant level or treatment technique under a national primary drinking water regulation, including identification of— (i) the national primary drinking water regulation in question for each such exemption, variance, or violation; and (ii) the date on which the exemption or variance came into effect or the violation began. . 7. Assistance for restructuring (a) Definition Section 1401 ( 42 U.S.C. 300f ) is amended by adding at the end the following: (17) Restructuring The term restructuring means changes in operations (including ownership, management, cooperative partnerships, joint purchasing arrangements, consolidation, and alternative water supply). . (b) Restructuring Clause (ii) of section 1452(a)(3)(B) ( 42 U.S.C. 300j–12(a)(3)(B) ) is amended by striking changes in operations (including ownership, management, accounting, rates, maintenance, consolidation, alternative water supply, or other procedures) and inserting restructuring . 8. Priority and weight of applications (a) Priority Section 1452(b)(3) ( 42 U.S.C. 300j–12(b)(3) ) is amended— (1) in subparagraph (A)— (A) in clause (ii), by striking and at the end; (B) in clause (iii), by striking the period at the end and inserting ; and ; and (C) by adding at the end the following: (iv) improve the ability of systems to protect human health and comply with the requirements of this title affordably in the future. ; (2) by redesignating subparagraph (B) as subparagraph (D); (3) by inserting after subparagraph (A) the following: (B) Affordability of new standards For any year in which enforcement begins for a new national primary drinking water standard, each State that has entered into a capitalization agreement pursuant to this section shall evaluate whether capital improvements required to meet the standard are affordable for disadvantaged communities in the State. If the State finds that such capital improvements do not meet affordability criteria for disadvantaged communities in the State, the State’s intended use plan shall provide that priority for the use of funds for such year be given to public water systems affected by the standard and serving disadvantaged communities. (C) Weight given to applications After determining priority under subparagraphs (A) and (B), an intended use plan shall provide that the State will give greater weight to an application for assistance if the application contains— (i) a description of measures undertaken by the system to improve the management and financial stability of the system, which may include— (I) an inventory of assets, including a description of the condition of the assets; (II) a schedule for replacement of assets; (III) an audit of water losses; (IV) a financing plan that factors in all lifecycle costs indicating sources of revenue from ratepayers, grants, bonds, other loans, and other sources to meet the costs; and (V) a review of options for restructuring; (ii) a demonstration of consistency with State, regional, and municipal watershed plans; (iii) a water conservation plan consistent with guidelines developed for such plans by the Administrator under section 1455(a); and (iv) a description of measures undertaken by the system to improve the efficiency of the system or reduce the system’s environmental impact, which may include— (I) water efficiency or conservation, including the rehabilitation or replacement of existing leaking pipes; (II) use of reclaimed water; (III) actions to increase energy efficiency; (IV) actions to generate or capture sustainable energy on site or through the transportation of water through the system; (V) actions to protect source water; (VI) actions to mitigate or prevent corrosion, including design, selection of materials, selection of coating, and cathodic protection; and (VII) actions to reduce disinfection byproducts. ; and (4) in subparagraph (D) (as redesignated by paragraph (2)) by striking periodically and inserting at least biennially . (b) Guidance Section 1452 ( 42 U.S.C. 300j–12 ) is amended— (1) by redesignating subsection (r) as subsection (t); and (2) by inserting after subsection (q) the following: (r) Small system guidance The Administrator may provide guidance and, as appropriate, tools, methodologies, or computer software, to assist small systems in undertaking measures to improve the management, financial stability, and efficiency of the system or reduce the system’s environmental impact. . 9. Disadvantaged communities (a) Assistance To increase compliance Section 1452(b)(3) ( 42 U.S.C. 300j–12(b)(3) ), as amended, is further amended by adding at the end the following: (E) Assistance to increase compliance A State’s intended use plan shall provide that, of the funds received by the State through a capitalization grant under this section for a fiscal year, the State will, to the extent that there are sufficient eligible project applications, reserve not less than 6 percent to be spent on assistance under subsection (d) to public water systems included in the State’s most recent list under paragraph (2)(D). . (b) Assistance for disadvantaged communities Section 1452(d) ( 42 U.S.C. 300j–12(d) ) is amended— (1) in paragraph (1), by adding at the end the following: Such additional subsidization shall directly and primarily benefit the disadvantaged community. ; and (2) in paragraph (3), by inserting , or portion of a service area, after service area . (c) Affordability criteria Section 1452(d)(3) is amended by adding at the end: Each State that has entered into a capitalization agreement pursuant to this section shall, in establishing affordability criteria, consider, solicit public comment on, and include as appropriate— (A) the methods or criteria that the State will use to identify disadvantaged communities; (B) a description of the institutional, regulatory, financial, tax, or legal factors at the Federal, State, or local level that affect identified affordability criteria; and (C) a description of how the State will use the authorities and resources under this subsection to assist communities meeting the identified criteria. . 10. Administration of State loan funds Section 1452(g) ( 42 U.S.C. 300j–12(g) ) is amended— (1) in paragraph (2)— (A) in the first sentence, by striking up to 4 percent of the funds allotted to the State under this section and inserting , for each fiscal year, an amount that does not exceed the sum of the amount of any fees collected by the State for use in covering reasonable costs of administration of programs under this section, regardless of the source, and an amount equal to the greatest of $400,000, 1/5 of one percent of the current valuation of the State loan fund, or 6 percent of all grant awards to the State loan fund under this section for the fiscal year, ; (B) by striking 1419, and all that follows through 1993. and inserting 1419. ; and (C) in the matter following subparagraph (D), by striking 2 percent and inserting 4 percent ; and (2) by adding at the end the following: (5) Transfer of funds (A) In general The Governor of a State may— (i) reserve for any fiscal year not more than the lesser of— (I) 33 percent of a capitalization grant made under this section; or (II) 33 percent of a capitalization grant made under section 601 of the Federal Water Pollution Control Act; and (ii) add the funds so reserved to any funds provided to the State under this section or section 601 of the Federal Water Pollution Control Act. (B) State matching funds Funds reserved under this paragraph shall not be considered for purposes of calculating the amount of a State contribution required by subsection (e) of this section or section 602(b) of the Federal Water Pollution Control Act. . 11. State revolving loan funds for American Samoa, Northern Mariana Islands, Guam, and the Virgin Islands Section 1452(j) ( 42 U.S.C. 300j–12(j) ) is amended by striking 0.33 percent and inserting 1 percent . 12. Authorization of appropriations Subsection (m) of section 1452 ( 42 U.S.C. 300j–12 ) is amended to read as follows: (m) Authorization of Appropriations (1) In general There are authorized to be appropriated to carry out this section— (A) $1,200,000,000 for fiscal year 2015; (B) $1,400,000,000 for fiscal year 2016; and (C) $1,600,000,000 for fiscal year 2017. (2) Availability Amounts made available pursuant to this subsection shall remain available until expended. (3) Reservation for needs surveys Of the amount made available under paragraph (1) to carry out this section for a fiscal year, the Administrator may reserve not more than $1,000,000 per year to pay the costs of conducting needs surveys under subsection (h). . 13. Affordability of new standards (a) Treatment technologies for small public water systems Clause (ii) of section 1412(b)(4)(E) ( 42 U.S.C. 300g–1(b)(4)(E) ) is amended by adding at the end the following: If no technology, treatment technique, or other means is included in a list under this subparagraph for a category of small public water systems, the Administrator shall periodically review the list and supplement it when new technology becomes available. . (b) Assistance for disadvantaged communities (1) In general Subparagraph (E) of section 1452(a)(1) ( 42 U.S.C. 300j–12(a)(1) ) is amended— (A) by striking except that the Administrator may reserve and inserting except that— (i) in any year in which enforcement of a new national primary drinking water standard begins, the Administrator may use the remaining amount to make grants to States whose public water systems are disproportionately affected by the new standard for the provision of assistance under subsection (d) to such public water systems; (ii) the Administrator may reserve ; and (B) by striking and none of the funds reallotted and inserting ; and (iii) none of the funds reallotted . (2) Elimination of certain provisions (A) Section 1412(b) ( 42 U.S.C. 300g–1(b) ) is amended by striking paragraph (15). (B) Section 1415 ( 42 U.S.C. 300g–4 ) is amended by striking subsection (e). (3) Conforming amendment Subparagraph (B) of section 1414(c)(1) ( 42 U.S.C. 300g–3(c)(1)(B) ) is amended by striking (a)(2), or (e) and inserting or (a)(2) . 14. Focus on lifecycle costs Section 1412(b)(4) ( 42 U.S.C. 300g–1(b)(4) ) is amended— (1) in subparagraph (D), by striking taking cost into consideration and inserting taking lifecycle costs, including maintenance, replacement, and avoided costs, into consideration ; and (2) in the matter preceding subclause (I) in subparagraph (E)(ii), by inserting taking lifecycle costs, including maintenance, replacement, and avoided costs, into consideration, after as determined by the Administrator in consultation with the States, . 15. Enforcement (a) Advice and technical assistance Section 1414 ( 42 U.S.C. 300g–3 ) is amended— (1) in the matter following clause (ii) in subsection (a)(1)(A), by striking and provide such advice and technical assistance to such State and public water system as may be appropriate to bring the system into compliance with the requirement by the earliest feasible time ; and (2) in subsection (a)(1), by adding at the end the following: (C) At any time after providing notice of a violation to a State and public water system under subparagraph (A), the Administrator may provide such advice and technical assistance to such State and public water system as may be appropriate to bring the system into compliance with the requirement by the earliest feasible time. In deciding whether the provision of advice or technical assistance is appropriate, the Administrator may consider the potential for the violation to result in serious adverse effects to human health, whether the violation has occurred continuously or frequently, and the effectiveness of past technical assistance efforts. . (b) Additional inspections (1) In general Section 1414 ( 42 U.S.C. 300g–3 ) is amended— (A) by redesignating subsections (d) through (i) as subsections (e) through (j), respectively; and (B) by inserting after subsection (c) the following: (d) Additional inspections following violations (1) In general The Administrator shall, by regulation, and after consultation with the States, prescribe the number, frequency, and type of additional inspections to follow any violation requiring notice under subsection (c). Regulations under this subsection shall— (A) take into account— (i) differences between violations that are intermittent or infrequent and violations that are continuous or frequent; (ii) the seriousness of any potential adverse health effects that may be involved; and (iii) the number and severity of past violations by the public water system; and (B) specify procedures for inspections following a violation by a public water system that has the potential to have serious adverse effects on human health as a result of short-term exposure. (2) State primary enforcement responsibility Nothing in this subsection shall be construed or applied to modify the requirements of section 1413. . (2) Conforming amendments (A) Subsections (a)(1)(B), (a)(2)(A), and (b) of section 1414 ( 42 U.S.C. 300g–3 ) are amended by striking subsection (g) each place it appears and inserting subsection (h) . (B) Section 1448(a) is amended by striking 1414(g)(3)(B) and inserting 1414(h)(3)(B) . 16. Presence of pharmaceuticals and personal care products in sources of drinking water Subsection (a) of section 1442 ( 42 U.S.C. 300j–1 ) is amended by adding at the end the following: (11) Presence of pharmaceuticals and personal care products in sources of drinking water (A) Study The Administrator shall carry out a study on the presence of pharmaceuticals and personal care products in sources of drinking water, which shall— (i) identify pharmaceuticals and personal care products that have been detected in sources of drinking water and the levels at which such pharmaceuticals and personal care products have been detected; (ii) identify the sources of pharmaceuticals and personal care products in sources of drinking water, including point sources and nonpoint sources of pharmaceutical and personal care products; (iii) identify the effects of such products on humans, the environment, and the safety of drinking water; and (iv) identify methods to control, limit, treat, or prevent the presence of such products. (B) Consultation The Administrator shall conduct the study described in subparagraph (A) in consultation with the Secretary of Health and Human Services (acting through the Commissioner of Food and Drugs), the Director of the United States Geological Survey, the heads of other appropriate Federal agencies (including the National Institute of Environmental Health Sciences), and other interested stakeholders (including manufacturers of pharmaceuticals and personal care products and consumer groups and advocates). (C) Report Not later than 4 years after the date of the enactment of this paragraph, the Administrator shall submit to the Congress a report on the results of the study carried out under this paragraph. (D) Definitions In this paragraph: (i) The term personal care product has the meaning given the term cosmetic in section 201 of the Federal Food, Drug, and Cosmetic Act. (ii) The term pharmaceutical has the meaning given the term drug in section 201 of the Federal Food, Drug, and Cosmetic Act. . 17. Electronic reporting of compliance monitoring data to the Administrator (a) Requirement Section 1414 ( 42 U.S.C. 300g–3 ), as amended, is further amended by adding at the end the following: (k) Electronic reporting of compliance monitoring data to the Administrator The Administrator shall by rule establish requirements for— (1) electronic submission by public water systems of all compliance monitoring data— (A) to the Administrator; or (B) with respect to public water systems in a State which has primary enforcement responsibility under section 1413, to such State; and (2) electronic submission to the Administrator by each State which has primary enforcement responsibility under section 1413 of all compliance monitoring data submitted to such State by public water systems pursuant to paragraph (1)(B). . (b) Final rule Not later than 12 months after the date of the enactment of this Act, the Administrator of the Environmental Protection Agency shall issue a final rule to carry out section 1414(k) of the Safe Drinking Water Act, as added by subsection (a). 18. Best practices for administration of State revolving loan fund programs Section 1452 of the Safe Drinking Water Act ( 42 U.S.C. 300j–12 ) is amended by inserting after subsection (r), as added by section 8(b), the following: (s) Best practices for program administration The Administrator shall— (1) collect information from States on administration of State programs with respect to State loan funds, including— (A) efforts to streamline the process for applying for assistance through such programs; (B) programs in place to assist with the completion of application forms; (C) incentives provided to systems that partner with small public water systems for the application process; and (D) techniques to ensure that obligated balances are liquidated in a timely fashion; (2) not later than 3 years after the date of enactment of the Assistance, Quality, and Affordability Act of 2014 , disseminate to the States best practices for administration of such programs, based on the information collected pursuant to this subsection; and (3) periodically update such best practices, as appropriate. . 19. Water loss and leak control technology Part E of the Safe Drinking Water Act ( 42 U.S.C. 300j et seq. ) is amended by adding at the end the following: 1459. Water loss and leak control technology The Administrator shall— (1) not later than 5 years after the date of enactment of the Assistance, Quality, and Affordability Act of 2014 , develop criteria for effective water loss and leak control technology to be used by water systems; and (2) implement a program through which a manufacturer of such technology may apply, on a voluntary basis, for certification of compliance with such criteria. .