[House Report 110-30]
[From the U.S. Government Publishing Office]
110th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 110-30
======================================================================
WATER QUALITY FINANCING ACT OF 2007
_______
March 5, 2007.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Oberstar, from the Committee on Transportation and Infrastructure,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 720]
[Including cost estimate of the Congressional Budget Office]
The Committee on Transportation and Infrastructure, to whom
was referred the bill (H.R. 720) to amend the Federal Water
Pollution Control Act to authorize appropriations for State
water pollution control revolving funds, and for other
purposes, having considered the same, report favorably thereon
with an amendment and recommend that the bill as amended do
pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
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.
TITLE VI--TONNAGE DUTIES
Sec. 601. Tonnage duties.
SEC. 2. AMENDMENT OF FEDERAL WATER POLLUTION CONTROL 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 provision, 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 paragraph (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 municipalities in the planning,
developing, and acquisition of financing for wastewater
infrastructure assistance;
``(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
requirements 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 municipality 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) 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 competition 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 following:
``(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 inserting ``, including low-
impact development technologies'' before the period at
the end; 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 pollution to reduce adverse impacts on
water quality.''.
(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 following:
``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 rehabilitation.--Notwithstanding
the requirement of subsection (a)(1) concerning the existence
of a collection system as a condition of eligibility, a project
for replacement or major rehabilitation of a collection system
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 requirement of
subsection (a)(2) concerning the existence of a community as a
condition of eligibility, a project for a new collection system
to serve a community 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 requirement of this
paragraph if the purpose of the project is to accomplish the
objectives, goals, and policies of this Act by addressing an
adverse environmental condition existing on the date of
enactment of this paragraph.''.
SEC. 202. TREATMENT WORKS DEFINED.
Section 212(2)(A) (33 U.S.C. 1292(2)(A)) is amended--
(1) by striking ``any works, including site'';
(2) by striking ``is used for ultimate'' and inserting ``will
be used for ultimate''; and
(3) by inserting before the period at the end the following:
``and acquisition of other lands, and interests 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 ``treatment works that meets the
requirements of this Act. The system may include water efficiency
measures and devices.''.
TITLE III--STATE WATER POLLUTION 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 standards 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 paragraph (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 providing financial assistance in
accordance with this title;
``(12) any fees charged by the State to recipients of
assistance will be used for the purpose of financing the cost
of administering the fund or financing 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 technologies for carrying
out the proposed project or activity for which
assistance is sought under this title, and has
selected, to the extent practicable, a project or
activity that may result in greater environmental
benefits or equivalent environmental benefits when
compared to standard processes, materials, techniques,
and technologies and more efficiently uses energy and
natural and financial resources; and
``(B) has considered the cost and effectiveness of
alternative management and financing approaches 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 criteria established by the State under section
603(i)(2) for activities included on the State's priority list
established under section 603(g), to the extent 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 revolving fund under this title, or both, will meet the
requirements of, or otherwise be treated (as determined by the
Governor of the State) under sections 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, construction management, feasibility
studies, preliminary engineering, 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 determined 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 authorized 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 Assistance.--Section
603(c) (33 U.S.C. 1383(c)) is amended to read as follows:
``(c) Projects and Activities Eligible for Assistance.--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 publicly 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 or reduce municipal stormwater
runoff;
``(7) to any municipality or intermunicipal, interstate, or
State agency for measures to reduce the demand for publicly
owned treatment works capacity 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 inserting ``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 subparagraph (C);
(2) by inserting ``and'' at the end of subparagraph (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 treatment
works;
``(ii) an evaluation of the condition and
performance of inventoried assets or asset
groupings; and
``(iii) a plan for maintaining, repairing,
and, as necessary, replacing that portion 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 paragraph (7) and
inserting ``; and''; and
(3) by adding at the end the following:
``(8) to provide owners and operators of treatment works that
serve a population of 10,000 or fewer with technical and
planning assistance and assistance in financial management,
user fee analysis, budgeting, capital improvement planning,
facility operation and maintenance, equipment replacement,
repair schedules, and other activities to improve wastewater
treatment plant management and operations; 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 following:
``(i) Additional Subsidization.--
``(1) In general.--In any case in which a State provides
assistance to a municipality or intermunicipal, interstate, or
State agency under subsection (d), the State may provide
additional subsidization, 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
affordability criteria if the recipient--
``(I) seeks additional subsidization
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
assistance 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
appropriate method) to such ratepayers;
or
``(B) to implement an innovative or alternative
process, material, technique, or technology (including
nonstructural protection of surface waters, a new or
improved method of waste treatment, and pollutant
trading) that may result in greater environmental
benefits, or equivalent environmental benefits at
reduced cost, when compared to a standard process,
material, technique, or technology.
``(2) Affordability criteria.--
``(A) Establishment.--On or before September 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 necessary to finance a project or activity
eligible for assistance under section 603(c)(1) if
additional subsidization is not provided. Such criteria
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, affordability criteria that meet
the requirements of subparagraph (A), the State may use
the criteria 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 criteria 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 obligation more than
$1,000,000,000 for the purposes of this title, a State
shall provide additional subsidization under this
subsection in the amount specified in subparagraph (B)
to eligible 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 between--
``(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 obligation 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 additional
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 September 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 appropriated to carry
out this title for each of fiscal years 2008 and 2009 shall be
allotted by the Administrator 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 allotted 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 subsection (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 assistance is sought from the
State's water pollution control revolving fund. Such projects
and activities shall be listed in priority order based on the
methodology established under paragraph (2). The State may
provide financial assistance from the State's water pollution
control revolving fund only with respect to a project or
activity included on such list. In the case of projects and
activities eligible for assistance under section 603(c)(2), the
State may include 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
priority list under paragraph (1).
``(B) Priority for projects and activities 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) and whether
such water quality improvements would be realized
without assistance under this title.
``(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 program
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 pollution that a
State may include on its priority list under paragraph
(1), the State may consider the cumulative water
quality improvements associated with projects or
activities in such categories 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 methodology 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 inserting ``each State
(acting through the State's water quality management agency and
other appropriate 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 paragraph (5) and
inserting ``; and''; and
(5) by adding at the end the following:
``(6) if the State does not fund projects and activities 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,''.
SEC. 307. TECHNICAL ASSISTANCE.
Title VI (33 U.S.C. 1381 et seq.) is amended--
(1) by redesignating section 607 as section 608; and
(2) by inserting after section 606 the following:
``SEC. 607. TECHNICAL ASSISTANCE.
``(a) Simplified Procedures.--Not later than 1 year after the date
of enactment of this section, the Administrator shall assist the States
in establishing simplified procedures for treatment works to obtain
assistance under this title.
``(b) Publication of Manual.--Not later than 2 years after the date
of the enactment of this section, and after providing notice and
opportunity for public comment, the Administrator shall publish a
manual to assist treatment works in obtaining assistance under this
title and publish in the Federal Register notice of the availability of
the manual.
``(c) Compliance Criteria.--At the request of any State, the
Administrator, after providing notice and an opportunity for public
comment, shall assist in the development of criteria for a State to
determine compliance with the conditions of funding assistance
established under sections 602(b)(13) and 603(d)(1)(E).''.
SEC. 308. AUTHORIZATION OF APPROPRIATIONS.
Section 608 (as redesignated by section 307 of this Act) is amended
by striking paragraphs (1) through (5) and inserting the following:
``(1) $2,000,000,000 for fiscal year 2008;
``(2) $3,000,000,000 for fiscal year 2009;
``(3) $4,000,000,000 for fiscal year 2010; and
``(4) $5,000,000,000 for fiscal year 2011.''.
TITLE IV--GENERAL PROVISIONS
SEC. 401. DEFINITION OF TREATMENT WORKS.
Section 502 (33 U.S.C. 1362) is amended by adding at the end the
following:
``(25) Treatment works.--The term `treatment works' has the
meaning given that term in section 212.''.
SEC. 402. FUNDING FOR INDIAN PROGRAMS.
Section 518(c) (33 U.S.C. 1377) is amended--
(1) by striking ``The Administrator'' and inserting the
following:
``(1) Fiscal years 1987-2006.--The Administrator'';
(2) in paragraph (1) (as so designated)--
(A) by inserting ``and ending before October 1,
2006,'' after ``1986,''; and
(B) by striking the second sentence; and
(3) by adding at the end the following:
``(2) Fiscal year 2007 and thereafter.--For fiscal year 2007
and each fiscal year thereafter, the Administrator shall
reserve, before allotments to the States under section 604(a),
not less than 0.5 percent and not more than 1.5 percent of the
funds made available to carry out title VI.
``(3) Use of funds.--Funds reserved under this subsection
shall be available only for grants for projects and activities
eligible for assistance under section 603(c) to serve--
``(A) Indian tribes;
``(B) former Indian reservations in Oklahoma (as
determined by the Secretary of the Interior); and
``(C) Native villages (as defined in section 3 of the
Alaska Native Claims Settlement Act (43 U.S.C.
1602)).''.
TITLE V--STUDIES
SEC. 501. STUDY OF LONG-TERM, SUSTAINABLE, CLEAN WATER FUNDING.
(a) Study.--Not later than 30 days after the date of enactment of
this Act, the Comptroller General shall commence a study of the funding
mechanisms and funding sources available to establish a Clean Water
Trust Fund.
(b) Contents.--The study shall include an analysis of potential
revenue sources that can be efficiently collected, are broad based, are
related to water quality, and that support the annual funding levels
authorized by the amendments made by this Act.
(c) Consultation.--In conducting the study, the Comptroller
General, at a minimum, shall consult with Federal, State, and local
agencies, representatives of business and industry, representatives of
entities operating publicly owned treatment works, and other interested
groups.
(d) Report.--Not later than January 1, 2008, the Comptroller
General shall submit to the Committee on Transportation and
Infrastructure of the House of Representatives and the Committee on
Environment and Public Works of the Senate a report on the results of
the study.
SEC. 502. FEASIBILITY STUDY OF SUPPLEMENTAL AND ALTERNATIVE CLEAN WATER
FUNDING MECHANISMS.
(a) Study.--Not later than 30 days after the date of enactment of
this Act, the Comptroller General shall commence a study of funding
mechanisms and funding sources potentially available for wastewater
infrastructure and other water pollution control activities under the
Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.).
(b) Contents.--The study shall include an analysis of funding and
investment mechanisms and revenue sources from other potential
supplemental or alternative public or private sources that could be
used to fund wastewater infrastructure and other water pollution
control activities under the Federal Water Pollution Control Act.
(c) Consultation.--In conducting the study, the Comptroller
General, at a minimum, shall consult with Federal, State, and local
agencies, representatives of business, industry, and financial
investment entities, representatives of entities operating treatment
works, and other interested groups.
(d) Report.--Not later than January 1, 2008, the Comptroller
General shall submit to the Committee on Transportation and
Infrastructure of the House of Representatives and the Committee on
Environment and Public Works of the Senate a report on the results of
the study.
TITLE VI--TONNAGE DUTIES
SEC. 601. TONNAGE DUTIES.
(a) In General.--Section 60301 of title 46, United State Code, is
amended--
(1) in the section heading by striking ``taxes'' and
inserting ``duties'';
(2) by amending subsections (a) and (b) to read as follows:
``(a) Lower Rate.--
``(1) Imposition of duty.--A duty is imposed at the rate
described in paragraph (2) at each entry in a port of the
United States of--
``(A) a vessel entering from a foreign port or place
in North America, Central America, the West Indies
Islands, the Bahama Islands, the Bermuda Islands, or
the coast of South America bordering the Caribbean Sea;
or
``(B) a vessel returning to the same port or place in
the United States from which it departed, and not
entering the United States from another port or place,
except--
``(i) a vessel of the United States;
``(ii) a recreational vessel (as defined in
section 2101 of this title); or
``(iii) a barge.
``(2) Rate.--The rate referred to in paragraph (1) shall be--
``(A) 4.5 cents per ton (but not more than a total of
22.5 cents per ton per year) for fiscal years 2006
through 2007;
``(B) 9.0 cents per ton (but not more than a total of
45 cents per ton per year) for fiscal years 2008
through 2017; and
``(C) 2 cents per ton (but not more than a total of
10 cents per ton per year) for each fiscal year
thereafter.
``(b) Higher Rate.--
``(1) Imposition of duty.--A duty is imposed at the rate
described in paragraph (2) on a vessel at each entry in a port
of the United States from a foreign port or place not named in
subsection (a)(1).
``(2) Rate.--The rate referred to in paragraph (1) shall be--
``(A) 13.5 cents per ton (but not more than a total
of 67.5 cents per ton per year) for fiscal years 2006
through 2007;
``(B) 27 cents per ton (but not more than a total of
$1.35 per ton per year) for fiscal years 2008 through
2017, and
``(C) 6 cents per ton (but not more than a total of
30 cents per ton per year) for each fiscal year
thereafter.''; and
(3) in subsection (c) by striking ``taxes'' and inserting
``duties''.
(b) Conforming Amendments.--Such title is further amended--
(1) by striking the heading for subtitle VI and inserting the
following:
``Subtitle VI--Clearance and Tonnage Duties'';
(2) in the headings of sections in chapter 603, by striking
``taxes'' and inserting ``duties'';
(3) in the heading for subsection (a) of section 60303, by
striking ``Tax'' and inserting ``Duty'';
(4) in the text of sections in chapter 603, by striking
``taxes'' each place it appears and inserting ``duties''; and
(5) in the text of sections in chapter 603, by striking
``tax'' each place it appears and inserting ``duty''.
(c) Clerical Amendments.--Such title is further amended--
(1) in the title analysis by striking the item relating to
subtitle VI and inserting the following:
``VI. CLEARANCE AND TONNAGE DUTIES.........................60101''; and
(2) in the analysis for chapter 603--
(A) by striking the items relating to sections 60301
and 60302 and inserting the following:
``60301. Regular tonnage duties.
``60302. Special tonnage duties.''; and
(B) by striking the item relating to section 60304
and inserting the following:
``60304. Presidential suspension of tonnage duties and light money.''.
Purpose of the Legislation
H.R. 720 amends the Federal Water Pollution Control Act
(``Clean Water Act'' or ``Act'') to reauthorize appropriations
for capitalization grants to states for state water pollution
control revolving funds.
Background and Need for Legislation
The Subcommittee on Water Resources and Environment of the
Committee on Transportation and Infrastructure has jurisdiction
over water quality and wastewater infrastructure programs
administered by the Environmental Protection Agency (``EPA'')
under the Federal Water Pollution Control Act, commonly known
as the Clean Water Act.
The importance of investment in wastewater infrastructure
To a great extent, improvements in water quality since the
passage of the 1972 Clean Water Act have resulted from a
significant investment in wastewater infrastructure
improvements throughout the country. Since 1972, the Federal
government has provided more than $82 billion for wastewater
infrastructure and other assistance, which has dramatically
improved water quality and the health of the economy and the
environment. During the same time period, overall investment in
the nation's wastewater infrastructure, from Federal, State,
and local sources, has been over $250 billion. Today, the
nationwide system of wastewater infrastructure includes 16,000
publicly owned wastewater treatment plants, 100,000 major
pumping stations, 600,000 miles of sanitary sewers, and 200,000
miles of storm sewers.
Investment in wastewater infrastructure has provided
significant environmental, public health, and economic benefits
to the nation. First through the Federal construction grants
program, and now the Clean Water State Revolving Fund (``Clean
Water SRF'') program, the investment in water infrastructure
has been integral to improving the quality of the nation's
waters. The improvements to water quality realized through
Federal, State, and local investment in wastewater
infrastructure have been significant, helping to increase the
number of fishable and swimmable waters throughout the nation.
As a result of dramatic improvements in wastewater
infrastructure, effluent discharges have decreased by one-half
since 1970, despite the fact that waste loads grew by more than
one-third due to population growth and an expanded economy.
Today, the nation's farmers, fishermen, and manufacturing and
tourism industries rely on clean water to carry out activities
that contribute more than $300 billion to our economy each
year.
However, these achievements are now at risk. According to a
2000 EPA report, entitled Progress in Water Quality, ``without
continued improvements in wastewater treatment infrastructure,
future population growth will erode away many of the Clean
Water Act achievements in effluent loading reduction.''
Given the expansion of the U.S. population forecast over
the next 20 years, EPA projects that by 2016, wastewater
treatment plants nationwide may discharge pollutants into U.S.
waters at levels similar to those that existed in the mid-
1970s, only a few years after the enactment of the Clean Water
Act. In addition, if these population forecasts are projected
further to the year 2025, without significant investment in
additional treatment capacity, the level of pollution being
discharged into the nation's waters would reach rates not seen
since 1968, four years before the enactment of the Act, when
they reached the maximum level ever recorded.
Without increased investment in wastewater infrastructure,
in less than a generation, the U.S. could lose much of the
gains it has made thus far in improving water quality as a
result of the 1972 Clean Water Act.
An additional concern is that much of the wastewater
infrastructure in this country is rapidly approaching or has
already exceeded its projected useful life. Many cities and
communities throughout the United States are currently facing a
critical juncture in the age and reliability of their water
infrastructure. For example, several major U.S. cities still
rely on sewer pipes that were installed more than 100 years ago
to collect and treat domestic sewage. In addition, many of the
wastewater treatment facilities constructed soon after
enactment of the Act are now reaching the end of their expected
useful life and are in need of repair or replacement.
Another looming need centers on upgrading aging
infrastructure to control and eliminate combined sewer
overflows. Combined sewer systems were among the earliest
sewers built in the United States and continued to be built
into the middle of the 20th century. These systems were
designed to carry both domestic sewage and industrial
wastewater, along with stormwater, to treatment facilities
before being discharged downstream. However, during heavy
rainfall or snowmelt, the volume of wastewater entering the
combined sewer system often exceeds its conveying capacity. To
prevent damage to the infrastructure, combined sewer systems
were designed to flow directly to surface waters when their
capacity is exceeded, discharging large volumes of untreated or
partially treated sewage wastes, directly into local waters. An
estimated 850 billion gallons of untreated or partially treated
sewage is discharged annually from combined sewer systems.
Because combined sewer overflows contain raw or partially-
treated sewage and contribute pathogens, solids, debris, and
toxic pollutants to receiving waters, they create serious
public health and water quality concerns. In addition, combined
sewer overflows are often the direct cause of (or significantly
contribute to) beach closures, shellfish bed closures,
contamination of drinking water supplies, and other
environmental and public health problems.
Combined sewers are found in 33 States across the U.S. and
the District of Columbia. The majority of combined sewers are
located in communities in the Northeast or Great Lakes regions,
where much of the oldest water infrastructure in the nation is
found. However, combined sewer overflows have also occurred in
the West, including the States of Washington, Oregon, and
California. To eliminate combined sewer overflows, communities
must redesign their sewer systems to separate sewage flows from
stormwater flows or provide significant additional capacity to
eliminate the possibility that combined flows will exceed the
limits of the infrastructure. Either way, this will be a
massive undertaking, estimated by EPA to cost more than $50
billion.
In the near future, many communities will need to repair or
replace large portions of their wastewater infrastructure or
face the likelihood of increased failures in their ability to
treat wastewater, posing a significant threat to the country's
quality of life, economic prosperity, and the health and safety
of both human populations and environmental quality.
Moreover, following the terrorist attacks of September 11,
2001, the identification and protection of critical
infrastructure has become a national priority, and protection
of critical wastewater infrastructure has become important to
homeland security. Utilities need to increase security and
implement measures to protect their wastewater treatment and
collection systems, which is placing a further demand for
resources on utilities.
The Clean Water Act requires EPA to report to Congress
every two years with a detailed estimate of the costs of needed
water infrastructure in each State. This report, which is
compiled through a survey of the States, includes estimates of
needed projects to achieve the improvements in water quality
necessary to meet the goals of the Clean Water Act, including
publicly owned municipal wastewater collection and treatment
facilities, facilities for the control of combined sewer
overflows, activities to control stormwater runoff and nonpoint
source pollution, and programs designed to protect the nation's
estuaries.
These state surveys show that the financial resources
necessary for wastewater infrastructure improvements are
substantial. According to EPA's most recent assessment of
wastewater infrastructure needs, the Clean Watersheds Needs
Survey 2000: Report to Congress, the existing documented needs
for the nation are $181.2 billion. In addition, according to
EPA's Clean Water and Drinking Water Infrastructure Gap
Analysis, between $300 billion and $400 billion in capital
investment is needed over the next 20 years for restoration and
replacement of the nation's aging wastewater infrastructure.
Considering that the average annual investment to the SRFs by
EPA over the past few years has trended downward from the
recent long-term average of $1.35 billion, the level of
investment necessary to address these needs and close the
current funding gap requires a renewed and expanded commitment
from all levels of government, including the Federal
Government.
Other organizations, including the Congressional Budget
Office (``CBO'') and a coalition of industry and other
stakeholders, all have estimated that significant increases in
investments are needed to address wastewater needs over the
next 20 years--as much as twice the current level of investment
by all levels of government. These estimates fall between CBO's
low-cost estimate of a $3.2 billion annual gap, and CBO's high-
cost estimate of an $11.1 billion annual gap. The needs are
especially urgent for areas trying to remedy the problem of
combined sewer overflows and sanitary sewer overflows, and for
small communities lacking sufficient independent financing
ability.
EPA is also examining how improved technologies and
innovative financing options might help close the gap between
projected needs and current expenditures. However, even if
wastewater systems are able to implement cost savings and
improved efficiencies, significant increases in investment from
all levels of government will be needed to meet projected
needs.
In addition, a significant number of small, rural, and
disadvantaged communities throughout the nation face challenges
financing wastewater infrastructure, either because of a lack
of sufficient financial resources or a declining ratepayer base
to address stranded infrastructure needs. In many of these
communities, even with the assistance of below-market rate
loans from the state revolving fund, communities still face
difficulties affording the increase in local wastewater rates
that would otherwise be necessary to finance wastewater
infrastructure needs. In many cases, addressing these
affordability issues may require an increased level of Federal
assistance through additional technical assistance, financial
flexibility, or subsidization to targeted communities or
ratepayers.
The Clean Water Act program
Titles II and VI of the Clean Water Act provide authority
for grants to States and municipalities and the establishment
of Clean Water SRFs, respectively, for the construction of
treatment works. The Construction Grants program, contained in
Title II of the Act, funded approximately $60 billion in
wastewater improvements over the life of the program. This
program was phased out in favor of state revolving loan funds
in the Water Quality Act of 1987 (P.L. 100-4).
Title VI of the Clean Water Act provides for the
establishment and capitalization of Clean Water SRFs to aid in
funding the construction of wastewater infrastructure for the
improvement of water quality throughout the nation.
Since 1987, the majority of Federal assistance for
wastewater infrastructure improvements has been through the
Clean Water SRF program. Through this program, individual
states and territories maintain revolving loan funds to provide
low-cost financing for approved infrastructure projects. Funds
to capitalize the Clean Water SRF programs are provided through
Federal capitalization grants and state matching funds (equal
to 20 percent of Federal Government grants). Since 1987,
Congress has appropriated more than $24 billion in
capitalization grants funded through general taxpayer revenues.
Clean Water SRF revenues also include receipts from the sale of
bonds, loan repayments, and interest earnings. From all
sources, more than $55 billion has been deposited into the
state revolving funds.
EPA has approved 57 states and territories for funding
under the Clean Water SRF program. Clean Water SRFs are
available to make low interest loans, buy or refinance local
debt, subsidize or insure local bonds, make loan guarantees,
act as security or guarantee of state debt, earn interest, and
pay administrative expenses. Clean Water SRF monies also may be
used to implement certain other water pollution control
programs such as nonpoint source pollution management and
national estuary programs. All projects must be those that will
assure maintenance of progress toward the goals of the Clean
Water Act and meet the standards and enforceable requirements
of the Act.
Through fiscal year 2005, the Clean Water SRFs have
provided $52.7 billion in loans for wastewater projects,
including $4.9 billion in loans in FY 2005 alone. Yet, the
demand for financial assistance from the Clean Water SRFs
continues to exceed available funds, forcing communities to
look elsewhere for the additional capital necessary for
wastewater infrastructure, or to defer wastewater
infrastructure improvements.
Communities raise the rest of the capital they may require
from other sources, primarily from banks and issuing municipal
bonds. Communities use revenues collected from rate-payers to
fund both operation and maintenance and repayment of the debt
they have incurred. Very few communities have sufficient
capital resources to fund infrastructure improvements without
incurring debt. Small, rural, and disadvantaged communities
face a shrinking pool of financing resources, and are
especially at a disadvantage in financing water and wastewater
infrastructure.
Summary of the Legislation
Section 1. Short title; table of contents
This section designates the title of the bill as the
``Water Quality Financing Act of 2007''.
Section 2. Amendment of Federal Water Pollution Control Act
This section provides that, unless otherwise expressly
provided, an amendment made by this legislation shall be
considered to be made to the Federal Water Pollution Control
Act (33 U.S.C. 1251 et seq.).
Title I. Technical and Management Assistance
Section 101. Technical assistance for rural and small treatment works
This section amends section 104 of the Clean Water Act to
authorize appropriations of $75 million annually through 2012
for an existing program within the Environmental Protection
Agency to fund research, demonstrations, and studies relating
to the causes, effects, extent, prevention, reduction, and
elimination of pollution; authorize appropriations of $15
million annually for a new program to provide financial and
technical assistance to rural and small communities; and
require EPA to develop procedures for competition and openness
in awarding grants to nonprofit agencies, institutions, and
organizations under section 104 of the Act.
Subsection (a) amends section 104(b) of the Act to
authorize EPA to make grants to nonprofit organizations to
assist rural and small municipalities in planning, developing,
and obtaining financing for projects and activities eligible
for assistance under this Act; provide technical assistance and
training for rural and small publicly owned treatment works and
decentralized wastewater treatment systems to enable them to
protect water quality and achieve and maintain compliance with
the requirements of the Act; and disseminate information to
rural and small municipalities and municipalities that meet a
state's affordability criteria with respect to planning,
design, construction, and operation of publicly owned treatment
works and decentralized wastewater treatment systems. The
Administrator of EPA (``Administrator'') is to ensure that, to
the maximum extent practicable, grants are made available to
each state, and to prioritize grants to rural and small
municipalities of 10,000 users or fewer. This subsection seeks
to address the concern that certain rural and small
municipalities may require additional technical assistance or
resources to apply for wastewater infrastructure assistance
under this Act.
Subsection (b) reauthorizes appropriations of $75 million
through 2012 for carrying out existing section 104(b)(3) and
new section 104(b)(8) of the Act, and requires that at least 20
percent of amounts appropriated pursuant to this paragraph are
used to carry out subsection 104(b)(8).
Subsection (c) amends section 104 of the Act to require EPA
to develop procedures for competition and openness in awarding
grants to nonprofit agencies, institutions, and organizations
under section 104 of the Act.
Section 102. State management assistance
This section amends section 106 of the Act to authorize
appropriations of $300 million annually through 2012 for an
existing EPA program that provides financial assistance to
state water quality management programs.
Section 103. Watershed pilot projects
This section authorizes appropriations of $20 million
annually through 2012 for an existing EPA pilot project program
that provides technical assistance and grants for treatment
works to carry out projects related to the management of
combined sewer overflows, sanitary sewer overflows, and
stormwater discharges, on a watershed or subwatershed basis.
Section 103 broadens the existing authority (section 122 of the
Act) to ensure that the Administrator considers the use of low-
impact development technologies in evaluating pilot projects
carried out under this section to demonstrate stormwater best
management practices, and to authorize pilot projects that
demonstrate cooperative ways to address nonpoint sources of
pollution and reduce adverse impacts on water quality, on a
watershed basis.
Section 103(c) amends section 122(d) of the Act to extend
the date for the submission of a report by the Administrator to
Congress on the results of pilot projects carried out under
this section until December 21, 2010.
Title II. Construction of Treatment Works
Section 201. Sewage collection systems
This section amends section 211 of the Act to clarify that
a community seeking financial assistance from the state
revolving fund for the replacement and rehabilitation of a
collection system in existence on January 1, 2007, or for the
construction of a new collection system for a community in
existence on January 1, 2007, that is otherwise eligible for
such assistance under section 211, shall be eligible for such
assistance, provided that the replacement and rehabilitation of
the existing collection system, or the new collection system is
to address an adverse environmental condition that exists as of
the date of enactment of this paragraph.
The Committee intends the pre-existing adverse
environmental condition language to provide a balance between
the need to address existing water quality concerns resulting
from population growth through increased collection system
capacity and the concern that collection system expansion could
result in increased sprawl. The Committee is aware of efforts
by several states to address similar water quality concerns
through the expanded use of decentralized wastewater treatment
systems, without the need to construct new collection systems
or expand existing collection systems. The Committee does not
intend the amendments made by section 201 to affect these
efforts, and encourages states to address ongoing water quality
concerns in a manner that does not rely solely on collection
systems or promote sprawl.
Section 202. Treatment works defined
This section amends the definition of treatment works in
section 212 of the Act to include, as an eligible cost, the
acquisition of lands and interests in land, necessary for
construction of the treatment works.
Section 203. Policy on cost effectiveness
This section amends section 218 of the Act to eliminate the
redundant restatement of the definition of treatment works. The
Committee does not intend to alter the underlying meaning of
section 218, and this amendment is viewed merely as a technical
amendment.
Title III. State Water Pollution Control Revolving Funds
Section 301. General authority for capitalization grants
This section amends section 601(a) of the Act to expand the
general statement of authority for use of a state water
pollution control revolving fund.
Section 302. Capitalization grant agreements
(a) Reporting Infrastructure Assets.--
Subsection (a) requires loan recipients to comply with
Federal accounting standards governing the reporting of
infrastructure assets.
(b) Additional Requirements.--
Subsection (b) amends section 602(b) of the Act to add or
renew several requirements as a condition of eligibility for a
state to receive a capitalization grant for its revolving fund.
New section 602(b)(11) requires a state to establish and
maintain its revolving fund in perpetuity. This requirement
exists in current law as the second sentence of existing
section 603(c), but is added to section 602(b) to consolidate
the list of conditions for state eligibility to receive a
capitalization grant.
New section 602(b)(12) requires states to use any fees
charged to loan applicants only for the purpose of financing
administrative costs or financing projects or activities
eligible for assistance from the fund.
New section 602(b)(13) directs states, beginning in fiscal
year 2009, to require loan applicants to evaluate innovative
and alternative processes, materials, techniques, and
technologies for carrying out the purposes of the Act, and
alternative ways to finance and manage water infrastructure
projects.
The Committee is aware that communities are feeling
considerable pressure to improve the management of their
wastewater systems to reduce costs and maintain sustainable
systems. Some communities are looking at innovative ways of
integrating decentralized, distributed, and nonstructural
wastewater management approaches, including the use of trees or
vegetation in urban areas (``green infrastructure''), to reduce
the need for expanded publicly owned treatment works
infrastructure, and to better manage, reduce, or reuse
stormwater. Other communities are exploring alternative ways to
design, finance, or manage wastewater infrastructure projects
to reduce their overall capital and operation and maintenance
costs, while providing the same or potentially greater water
quality improvement benefits. Yet, communities may be reluctant
to implement these innovative approaches or methods for various
reasons.
The Committee has received testimony on the importance of
encouraging communities to explore alternative means to address
wastewater treatment needs, including alternative approaches to
respond to local water quality needs, such as the use of
decentralized, distributed, and nonstructural wastewater
management approaches, addressing wastewater infrastructure
needs on a regional basis, or the consolidation of smaller
systems into larger treatment works. The Committee also has
received testimony on the importance of addressing the need for
additional funding for wastewater infrastructure projects,
including through alternative financing approaches, such as
increased leveraging of state revolving funds, rate structures,
or encouraging additional capital investment, both public and
private, to close the overall funding gap in wastewater
infrastructure needs.
New section 602(b)(13) seeks to encourage loan recipients
to explore additional options for processes, materials,
techniques, and technologies for improving water quality, and,
where possible, achieving greater environmental benefits and
more efficiently using energy and natural and financial
resources. This paragraph also seeks to encourage loan
recipients to consider alternative approaches for designing,
financing, and managing projects (including, where appropriate,
rate structure, issuance of bonds, restructuring, regional
alternatives, consolidation, and cooperation between the public
and private sectors) for which assistance is sought under the
Clean Water SRF program. This paragraph does not require that
any particular option be selected or that every option need be
analyzed, but encourages loan recipients to consider an array
of options that are appropriate to meet their local needs and
improve local water quality.
New section 602(b)(14) directs states to use at least 15
percent of its annual capitalization grant to assist small
municipalities serving fewer than 10,000 individuals that meet
a state's affordability criteria, to the extent that there are
sufficient applications for such assistance.
New section 602(b)(15) reinstates several Title II
requirements that were applied to projects for the construction
of publicly owned treatment works prior to October 1, 1994,
under existing 602(b)(6). New section 602(b)(15) reinstates
requirements related to the assurance that recipients of
financing under this Act for publicly owned treatment works
will adopt a system of charges, including ad valorem taxes or
user charges, to ensure adequate construction, operation, and
maintenance of the treatment works; a limitation on the
replacement of existing sewage collection systems or the
construction of new sewage collection systems; the policy of
Congress that treatment work systems constructed with funding
under this Act constitute the most economic and cost-effective
means of meeting the requirements of this Act; and the
application of the National Environmental Policy Act of 1969.
New section 602(b)(16) requires a state to utilize a
Federal or equivalent state qualifications-based selection
process for the negotiation of architectural and engineering
services on the basis of demonstrated performance and
qualification for the type of professional services required at
a fair and reasonable price. A qualifications-based selection
process is a competitive procedure that takes into account
qualifications and experience, as well as cost, in relation to
the work performed.
New section 602(b)(17) establishes the Davis-Bacon
prevailing wage requirement for the construction of treatment
works carried out with assistance made available by the state
revolving fund, section 205(m), or both. Section 513 of the Act
provides that ``all laborers and mechanics employed by
contractors or subcontractors on treatment works for which
grants are made under this Act shall be paid wages at rates not
less than those prevailing for the same type of work on similar
construction in the immediate locality.'' New section
602(b)(17) requires the application of the Davis-Bacon
requirements for the construction of treatment works carried
out in whole or in part with assistance made available from
state revolving loan funds under Title VI, funds from section
205(m) of the Act, or both. This amendment authorizes the
application of the prevailing wage requirements to construction
projects carried out with any financial assistance from the
state revolving fund, whether the source of assistance
originates from Federal capitalization grant funds, state
matching funds, repayments to the fund, interest payments, or
other sources of income to the state revolving fund, and
whether the character of the assistance is through loans, loan
guarantees, or other types of assistance authorized by section
603(d).
By establishing the Davis-Bacon prevailing wage requirement
for the construction of treatment works, the Committee
continues its long-standing practice of ensuring the
application of Davis-Bacon where Federal funds are provided for
construction, such as the State Infrastructure Banks (SIBs)
established under the Transportation Equity Act for the 21st
Century, and reauthorized in the Safe, Accountable, Flexible,
Efficient Transportation Equity Act: A Legacy for Users. For
the Clean Water SRFs, the most significant source of revenue in
the state revolving funds is the Federal capitalization grant.
As Congress has done in 63 separate instances for Federally-
funded construction, the Davis-Bacon Act should apply to the
reauthorization of the Clean Water SRFs.
Prevailing wage laws are intended to provide a fair wage
for publicly funded construction. By requiring prevailing
wages, lower cost, out-of-state contractors are prevented from
having an unfair ability to compete for local publicly funded
construction. Local interests are better able to compete when
on equal footing with out-of-state competitors, and local
construction workers are protected.
In addition, the Committee believes that the Davis-Bacon
Act protects communities by ensuring that prevailing wage
determinations for individual counties are based solely on the
local workforce costs where the construction projects are to be
undertaken. In 1981, the U.S. Department of Labor specifically
amended the implementing regulations for the Davis-Bacon Act to
prohibit the Department from including any wage data collected
from urban areas, and applying the data in a wage determination
for a nearby rural county.
As noted in the Code of Federal Regulations, ``In making a
wage determination . . . projects in metropolitan counties may
not be used as a source of data for a wage determination in a
rural county, and projects in rural counties may not be used as
a source of data for a wage determination for a metropolitan
county.'' (29 CFR Subtitle A 1.7 (a) and (b)).
Also, studies have shown that the application of the
prevailing wage requirements of the Davis-Bacon Act attract
more experienced and better trained workers who are often more
productive than workers with less training and experience. This
increase in productivity often results in the completion of
construction project ahead of schedule, reducing the overall
cost of the project, and offsetting any increased costs dues to
higher hourly wage rates. Labor costs, traditionally speaking,
account for less than one-third of total construction costs,
with the costs of land and materials having a much larger
impact on the total costs of projects.
Section 303. Water pollution control revolving loan funds
(a) Projects and Activities Eligible for Assistance.--
Subsection (a) amends section 603(c) of the Act to expand
the types of projects and activities eligible for assistance
through each state revolving fund. Current law authorizes funds
from the state revolving fund to be used for providing
financial assistance (1) to any municipality or intermunicipal,
interstate, or state agency for construction of publicly owned
treatment works; (2) for the implementation of a nonpoint
source management program under section 319 of the Act; and (3)
for the development and implementation of a conservation and
management plan under the National Estuary Program (section 320
of the Act). Subsection (a) expands the types of projects and
activities eligible for assistance to include: (1) the
implementation of lake protection programs and projects under
section 314 of the Act; (2) the repair and replacement of
decentralized wastewater treatment systems that treat domestic
sewage; (3) measures to manage or reduce municipal stormwater
runoff; (4) projects for water conservation, efficiency, or
reuse; (5) increased security measures at publicly owned
treatment works; and (6) the development and implementation of
watershed pilot projects under section 122 of the Act (as
amended by this legislation).
(b) Extended Repayment Period.--
Subsection (b) amends section 603(d)(1) of the Act to
authorize states to extend the repayment period for a loan from
the state revolving fund from the current statutory limit of 20
years to 30 years or the expected design life of the project
financed with the proceeds of the loan, whichever period is
shorter. A longer repayment period should assist in increasing
the affordability of wastewater infrastructure projects.
(c) Fiscal Sustainability Plan.--
Subsection (c) amends section 603(d)(1) of the Act to
require, as a condition of eligibility for a loan from the
state revolving fund, that the loan recipient develop and
implement, for any portion of the treatment works proposed for
repair, replacement, or expansion, a fiscal sustainability plan
for that portion. The fiscal sustainability plan shall include:
an inventory of the critical assets for that portion of the
treatment works proposed for repair, replacement, or expansion;
an evaluation of the condition and performance of the
inventory; and a plan for maintaining, repairing, and, as
necessary, replacing that portion, including a plan for funding
such activities. Implementation of a fiscal sustainability plan
should encourage communities to more efficiently manage and
maintain their wastewater infrastructure.
(d) Administrative Expenses.--
Subsection (d) amends section 603(d)(7) of the Act to
authorize states to utilize either four percent of the
capitalization grant (current law), $400,000 a year, or up to
one-fifth of one percent of the total valuation of the state
revolving fund, whichever amount is greatest, for
administrative expenses, plus any fees collected for such
purposes.
(e) Technical, Planning, and Equipment Replacement Expenses
for Small Systems.--
Subsection (e) amends section 603(d) of the Act to
authorize states to use up to two percent of the annual
capitalization grant for the state revolving fund to provide
technical, planning, and equipment replacement assistance to
treatment works servicing communities of fewer than 10,000
individuals. This subsection should assist communities of fewer
than 10,000 individuals plan, manage, and maintain their
wastewater infrastructure.
(f) Additional Subsidization.--
Subsection (f) amends section 603 of the Act to authorize
states to provide increased financial flexibility in the form
of additional subsidization, including forgiveness of principal
and negative interest loans to municipalities: (1) that are
economically disadvantaged based on affordability criteria
established by the state; (2) that do not meet a state's
affordability criteria as a whole, but have discrete, definable
subpopulations or neighborhoods that will experience a
significant hardship from increased rates, provided that any
additional subsidization will directly benefit those
ratepayers; or (3) that implement an innovative or alternative
process, material, technique, or technology (including the use
of nonstructural protection of surface waters, a new or
improved method of waste treatment, and pollutant trading) that
may result in greater environmental benefits, or equivalent
environmental benefits at a reduced cost.
The Committee has received testimony on the existence of
disadvantaged communities throughout the nation that are
experiencing significant challenges financing the wastewater
infrastructure improvements necessary to achieve improvements
in water quality, even with the advantage of below-market rates
offered by the Clean Water SRF. Subsection 303(f) authorizes a
state revolving fund to provide certain disadvantaged
communities, and targeted populations within communities, with
additional financial subsidizations to assist them in meeting
their wastewater infrastructure needs.
As noted in the discussion on section 302(b), the Committee
has also received testimony on the efforts of communities to
reduce the need for expanded publicly owned treatment works
infrastructure through the use of innovative and alternative
means to respond to local water quality needs. Subsection
303(f) also authorizes a state revolving fund to provide
increased financial flexibility to implement these innovative
and alternative processes, materials, techniques, and
technologies, including the use of decentralized, distributed,
and nonstructural wastewater management approaches, innovative
pipe replacement technologies, and pollutant trading of
nutrients, to encourage communities to pursue other options to
address local water quality concerns.
Moreover, subsection (f) requires states to establish
affordability criteria on or before September 30, 2008, to
assist in identifying municipalities that would experience
significant hardship from rate increases necessary to finance
the construction of publicly owned treatment works. Subsection
(f) allows states to use existing criteria that meet the
requirements of this subsection.
New section 603(i)(3) of the Act, as amended by this
legislation, authorizes states to give priority to a project by
a municipality, or an intermunicipal, interstate, or state
agency for the construction of a publicly owned treatment work
if the recipient of the funds meets a state's affordability
criteria.
New section 603(i)(4) of the Act, as amended by this
subsection, requires states to use 25 percent of any increases
in a Federal capitalization grant allotted to a state in fiscal
years where the Administrator has available for obligation
funds of more than $1 billion to provide additional
subsidization, provided that eligible projects are identified
for funding on a state's priority list. This subsection places
an overall cap of 30 percent of the total amount of
capitalization grants received by the state on the amount of
additional subsidization that a state may provide.
Section 304. Allotment of funds
Subsection (a)(1) preserves the current statutory state
revolving fund allotment formula for capitalization grants
(section 205 of the Act, as modified) for the first $1.35
billion of any future fiscal year appropriation. Subsection (c)
directs the Administrator, after notice and public comment, to
publish a new allotment formula based on water quality needs in
accordance with the most recent state survey of needs. For
fiscal year 2010 and thereafter, subsection (a)(2) directs the
Administrator to allocate any appropriated funds for the state
revolving fund in excess of $1.35 billion in accordance with
the revised formula.
Subsection (b) amends section 604(b) of the Act to increase
the amount a state may reserve for water quality management
planning (section 205(j) of the Act) and state continuing
planning processes (section 303(e) of the Act) from the current
statutory limit of one percent of the annual state
capitalization grant to two percent.
Section 305. Intended use plan
(a) Integrated Priority List.--
Section 305(a) requires states to develop, after notice and
comment and within one year, a methodology for prioritizing
wastewater infrastructure projects and activities based on the
greatest degree of water quality improvement, while taking into
consideration whether funds will be used toward compliance with
the enforceable deadlines, goals, and requirements of the Act,
and the affordability of projects and activities to individual
communities. This subsection requires states to use this
methodology to develop, for each future fiscal year beginning
in fiscal year 2009, an integrated priority list for all
projects and activities for which financial assistance is
sought from the state revolving fund.
To address the potential that smaller, individual projects
or activities to address nonpoint sources of pollution may not
rank sufficiently high on a state's priority list, this
subsection authorizes a state to group categories or
subcategories of projects or activities to address nonpoint
sources of pollution on the state's priority list in lieu of
specific projects or activities.
(b) Intended Use Plan.--
Section 305(b) amends section 606(c) of the Act to require
a state to annually prepare and publish its intended use plan,
to provide notice and comment on the state's priority list, as
part of the state's intended use plan, and to provide an
explanation if the state does not fund projects on its intended
use plan in priority order.
(c) Transitional Provision.--
Section 305(c) allows states to use existing statutory
provisions governing priority lists and intended use plans
until the methodology required under this legislation is
developed.
Section 306. Annual reports
This section amends section 606(d) of the Act to require
that a state include, as part of its existing reporting
requirements to EPA, a list of the eligible purposes for which
state revolving funds are provided.
Section 307. Technical assistance
This section directs the Administrator to assist states in
establishing simplified procedures for obtaining financial
assistance from the state revolving fund. This section requires
the Administrator, after notice and comment, to publish a
manual to assist eligible recipients in obtaining financial
assistance from the state revolving fund. This section directs
the Administrator, at the request of a state and after notice
and comment, to assist in the development of criteria for a
state to determine compliance with the conditions of funding
assistance under sections 602(b)(13) and 603(d)(1)(E) of the
Act.
Section 308. Authorization of appropriations
This section authorizes appropriations of $14 billion over
four years for the capitalization of state revolving funds, as
follows: $2 billion in fiscal year 2008, $3 billion in fiscal
year 2009, $4 billion in fiscal year 2010, and $5 billion in
fiscal year 2011.
Title IV. General Provisions
Section 401. Definition of treatment works
This section amends the definitions section of the Act
(section 502) to make the definition of ``treatment works''
found in section 212 of the Act applicable to the entire Act.
Section 402. Funding for Indian programs
This section increases the authorized set-aside from state
revolving loan funding for Indian Programs from the current law
amount of one-half of one percent to not more than 1.5 percent
of the total Federal appropriation for the capitalization of
state revolving funds.
Title V. Studies
Section 501. Study of long-term, sustainable, clean water funding
This section directs the Comptroller General of the
Government Accountability Office to conduct a study of
potential funding mechanisms and revenue sources for the
establishment and financing of a Clean Water Trust Fund.
Section 501 directs the Comptroller General to report to
Congress by January 1, 2008, on the results of the study.
Section 502. Feasibility study of supplemental and alternative clean
water funding mechanisms
This section directs the Comptroller General of the
Government Accountability Office to conduct a study of
potential funding and investment mechanisms and revenue sources
from other potential public or private sources that could be
used to fund wastewater infrastructure and other water
pollution control activities. Section 502 directs the
Comptroller General to report to Congress by January 1, 2008,
on the results of the study.
Title VI. Tonnage Duties
Section 601. Tonnage duties
This section restores the Vessel Tonnage Duties to the
rates that were in effect from 1990 to 2002. Vessel Tonnage
Duties are imposed on the cargo-carrying capacity of vessels
that enter the United States from any foreign port or place, or
depart from and return to a United States Port or place on a
``voyage to nowhere''. The Duties are assessed regardless of
whether the vessel is empty or carrying cargo. These fees are
intended to offset the cost of activities performed by the U.S.
Coast Guard that benefit these vessels, such as marine safety,
search and rescue, and aids to navigation. The Coast Guard
spends far more on these activities than is currently being
collected by this fee.
Beginning in 1909, a tonnage duty of two cents per ton, not
to exceed ten cents per ton in a single year, was imposed on
vessels arriving in the United States from a foreign port in
North America, Central America, the West Indian Islands, the
Bahaman Islands, and Newfoundland. A duty of six cents per ton,
not to exceed 30 cents per ton in a single year, was imposed
for vessels arriving in the United States from foreign ports
anywhere else in the world.
In 1990, Congress adjusted the tonnage duties to reflect
the inflation increase from 1915 to 1990. Congress extended the
fees at the 1990-adjusted rates in 1993 and 1997. These tonnage
duties remained in effect from fiscal years 1990 through 2002.
In 2005, Congress partially reinstated the 1990-adjusted
tonnage duties through fiscal year 2010.
Specifically, section 601 increases the 4.5-cent-per-ton
duty to nine cents per ton, not to exceed in the aggregate 45
cents per ton in any year, and the 13.5-cent-per-ton duty to 27
cents per ton, not to exceed $1.35 per ton in a year. The
tonnage duty applies to the first five entries into the United
States each year by a vessel. These rates would be in effect
for fiscal years 2008 through 2017.
Legislative History and Committee Consideration
The Subcommittee on Water Resources and Environment has
held numerous hearings on the nation's wastewater
infrastructure needs and the importance of a renewed commitment
to addressing these needs. On March 28, 2001, the Subcommittee
held a hearing entitled ``Water Infrastructure Needs''. On
March 19, 2003, the Subcommittee held a hearing entitled
``Meeting the Nation's Wastewater Infrastructure Needs''. On
April 28, 2004, the Subcommittee held a hearing entitled
``Aging Water Supply Infrastructure''. On June 8 and 14, 2005,
the Subcommittee held a series of hearings entitled ``Financing
Water Infrastructure Projects''. On January 19, 2007, the
Subcommittee held a hearing entitled ``The Need for Renewed
Investment in Clean Water Infrastructure''.
In prior Congresses, the Subcommittee has also developed
and considered numerous bills to reauthorize increasing
appropriations for the Clean Water State Revolving Fund.
In the 107th Congress, the bipartisan leadership of the
Subcommittee introduced H.R. 3930, the Water Quality Financing
Act of 2002. On March 13, 2002, the Subcommittee held a
legislative hearing on H.R. 3930. On March 20, 2002, the
Committee on Transportation and Infrastructure met in open
session, and ordered H.R. 3930 reported, as amended, to the
House by voice vote. No further action was taken on this bill.
In the 108th Congress, the then-Chairman of the
Subcommittee introduced H.R. 1560, the Water Quality Financing
Act of 2003. This bill was largely based on H.R. 3930 from the
107th Congress. On July 17, 2003, the Subcommittee on Water
Resources and Environment met in open session, and ordered H.R.
1560 reported, as amended, to the Committee on Transportation
and Infrastructure by voice vote. No further action was taken
on this bill.
In the 109th Congress, the then-Chairman of the
Subcommittee introduced H.R. 4560, the Clean Water Trust Act of
2005, to create a national clean water trust fund as a means
for financing wastewater infrastructure needs. No further
action was taken on this legislation.
On January 30, 2007, Chairman James L. Oberstar,
Representative Don Young, Chairwoman Eddie Bernice Johnson, and
Representative Ellen O. Tauscher introduced H.R. 720, the Water
Quality Financing Act of 2007. On January 31, 2007, the
Subcommittee on Water Resources and Environment met in open
session to markup several bills related to renewing the Federal
commitment to repairing and replacing the nation's wastewater
infrastructure, including H.R. 720. The Subcommittee adopted,
by voice vote, an amendment to authorize a study of additional
potential revenue sources, including public and private
sources, to address wastewater infrastructure needs. The
Subcommittee recommended the bill, as amended, favorably to the
Committee on Transportation and Infrastructure, by voice vote.
On February 7, 2007, the Committee on Transportation and
Infrastructure met in open session, and ordered the bill, as
amended by the Subcommittee, reported favorably to the House by
recorded vote of 55-13.
On March 1, 2007, the Committee on Transportation and
Infrastructure met in open session, to reconsider H.R. 720, as
ordered reported on February 7, 2007, to address a budget
scoring issue with the bill. The Committee agreed by voice vote
to a motion to reconsider the vote on ordering H.R. 720
reported favorably to the House as adopted by the Committee on
February 7, 2007. By unanimous consent, the Committee vacated
the question of ordering the bill reported and considered the
bill for amendment. The Committee approved, by voice vote, an
amendment in the nature of a substitute that made two changes
to the bill ordered reported on February 7, 2007. First, the
amendment reduced the authorization of appropriations for the
Clean Water SRF program from $20 billion over five years to $14
billion over four years, as follows: $2 billion in fiscal year
2008, $3 billion in fiscal year 2009, $4 billion in fiscal year
2010, and $5 billion in fiscal year 2011. Second, the amendment
restored the United States Coast Guard Vessel Tonnage Duties to
the levels that were in effect in the 1990s to offset the cost
of H.R. 720, as amended. The Committee ordered the bill, as
amended by the Committee, reported favorably to the House by
voice vote.
Record Votes
Clause 3(b) of rule XIII of the House of Representatives
requires each committee report to include the total number of
votes cast for and against on each record vote on a motion to
report and on any amendment offered to the measure or matter,
and the names of those members voting for and against. On
February 7, 2007, the Committee on Transportation and
Infrastructure met in open session, and ordered the bill, as
amended by the Subcommittee, reported favorably to the House by
record vote of 55-13.
Ordering H.R. 720, as Amended, Reported Favorably to the House (55-13)
February 7, 2007
On March 1, 2007, the Committee on Transportation and
Infrastructure met in open session, to reconsider H.R. 720, as
ordered reported on February 7, 2007, to address a budget
scoring issue with the bill. The Committee agreed by voice vote
to a motion to reconsider the vote on ordering H.R. 720
reported favorably to the House as adopted by the Committee on
February 7, 2007. By unanimous consent, the Committee vacated
the question of ordering the bill reported and considered the
bill for amendment. The Committee approved, by voice vote, an
amendment in the nature of a substitute that made two changes
to the bill ordered reported on February 7, 2007. The Committee
ordered the bill, as amended by the Committee, reported
favorably to the House by voice vote.
Committee Oversight Findings
With respect to the requirements of clause 3(c)(I) of rule
XIII of the Rules of the House of Representatives, the
Committee's oversight findings and recommendations are
reflected in this report.
Cost of Legislation
Clause 3( c)(2) of rule XIII of the Rules of the House of
Representatives does not apply where a cost estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974 has been timely submitted prior to the filing of the
report and is included in the report. Such a cost estimate is
included in this report.
Compliance With House Rule XIII
1. With respect to the requirement of clause 3(c)(2) of
rule XIII of the Rules of the House of Representatives, and
308(a) of the Congressional Budget Act of 1974, the Committee
references the report of the Congressional Budget Office
included below.
2. With respect to the requirement of clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, the
performance goals and objective of this legislation are to
accomplish the objectives, goals, and policies of the Federal
Water Pollution Control Act by providing assistance: for the
construction of publicly owned treatment works; for the
implementation of a nonpoint source management program under
section 319 of the Act; for the development and implementation
of a conservation and management plan under the National
Estuary Program; for the implementation of lake protection
programs and projects under section 314 of the Act; for the
repair and replacement of decentralized wastewater treatment
systems that treat domestic sewage; for measures to manage or
reduce municipal stormwater runoff; for water conservation
projects; for increased security measures at publicly owned
treatment works; and for the development and implementation of
watershed pilot projects under section 122, as amended by this
legislation.
3. With respect to the requirement of clause 3(c)(3) of
rule XIII of the Rules of the House of Representatives and
section 402 of the Congressional Budget Act of 1974, the
Committee has received the following cost estimate for H.R. 720
from the Director of the Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 5, 2007.
Hon. James L. Oberstar,
Chairman, Committee on Transportation and Infrastructure,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 720, the Water
Quality Financing Act of 2007.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Susanne S.
Mehlman and Deborah Reis.
Sincerely,
Peter R. Orszag,
Director.
Enclosure.
H.R. 720--Water Quality Financing Act of 2007
Summary: CBO estimates that implementing this legislation
would cost about $9.2 billion over the next five years,
assuming the appropriation of the necessary amounts, for the
Environmental Protection Agency (EPA) to provide various types
of grants to states and nonprofit organizations to support
water quality projects and programs. The Joint Committee on
Taxation (JCT) estimates that enacting H.R. 720 would reduce
revenues by $50 million over the 2008-2012 period and by $541
million over the next 10 years. CBO estimates that enacting
title VI would increase vessel tonnage charges on vessels
entering the United States from any foreign port or place,
effective for fiscal years 2008-2017. Those charges would
increase offsetting receipts, which are credits against direct
spending, by $615 million over the 2008-2017 period.
H.R. 720 contains no intergovernmental mandates as defined
in the Unfunded Mandates Reform Act (UMRA) and would impose no
costs on state, local, or tribal governments.
H.R. 720 contains private-sector mandates, as defined in
UMRA on operators of vessels entering the United States from
any foreign port or place by increasing certain vessel tonnage
duties over the 2008-2017 period. CBO estimates that the
incremental direct costs of complying with those mandates would
fall below the annual threshold established by UMRA for
private-sector mandates ($131 million in 2007, adjusted
annually for inflation).
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 720 is shown in the following table.
The costs of this legislation fall within budget function 300
(natural resources and environment).
TABLE 1.--BUDGETARY EFFECTS OF H.R. 720
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------
2007 2008 2009 2010 2011 2012
----------------------------------------------------------------------------------------------------------------
CHANGES IN REVENUES
Changes to Tax-Exempt Financing:
Estimated Revenues \1\................................ 0 * -1 -4 -13 -31
CHANGES IN SPENDING DIRECT SPENDING
Vessel Tonnage Charges:
Estimated Budget Authority............................ 0 -40 -41 -41 -67 -68
Estimated Outlays..................................... 0 -40 -41 -41 -67 -68
SPENDING SUBJECT TO APPROPRIATION
Spending Under Current Law:
Budget Authority \2\.................................. 1,300 0 0 0 0 0
Estimated Outlays..................................... 1,412 1,211 781 562 430 409
Proposed Changes:
Clean Water SRF Grants:
Authorization Level............................... 0 2,000 3,000 4,000 5,000 0
Estimated Outlays................................. 0 100 450 1250 2,350 3,150
Technical Assistance and Research Grants:
Estimated Authorization Level..................... 0 75 75 75 75 75
Estimated Outlays................................. 0 38 60 71 75 75
State Management Assistance Grants:
Authorization Level............................... 0 300 300 300 300 300
Estimated Outlays................................. 0 285 300 300 300 300
Watershed Pilot Projects:
Authorization Level............................... 0 20 20 20 20 20
Estimated Outlays................................. 0 10 16 19 20 20
Total Proposed Changes \3\:
Estimated Authorization Level................. 0 2,396 3,395 4,395 5,395 395
Estimated Outlays............................. 0 434 826 1,640 2,745 3,545
Spending Under H.R. 720:
Estimated Authorization Level......................... 1,300, 2,396, 3,395, 4,395, 5,395, 395
Estimated Outlays..................................... 1,412 1,645 1,607 2,202 3,175 3,954
----------------------------------------------------------------------------------------------------------------
Note.--*= revenue loss of less than $500,000.
\1\ Estimate provided by JCT.
\2\ The 2007 level is the amount appropriated for that year to EPA to support its grant programs related to
waste water.
\3\ H.R. 720 also would require the Government Accountability Office to prepare two studies required under the
bill. CBO estimates that those studies would cost about $1 million.
Basis of estimate: For this estimate, CBO assumes that H.R.
720 will be enacted in fiscal year 2007, that the full amounts
authorized will be appropriated, and that outlays will follow
the historical patterns of similar EPA programs. Components of
the estimated costs are described below.
Revenues
This bill would increase the funds available under the
clean water State Revolving Fund (SRF) program, which could
result in some states leveraging their funds by issuing
additional tax-exempt bonds. The JCT estimates that consequent
reductions in revenue would total $50 million over the 2008-
2012 period, and $541 million over the next 10 years (see Table
2).
Direct spending
Title VI would increase, through fiscal year 2017, per-ton
duties on vessels arriving at U.S. ports from foreign ports. On
vessels arriving from such ports in the Western
Hemisphere,vessels arriving from other foreign ports, the rate would
rise to 27 cents (with a maximum of $1.35 per year). Under existing law
(as amended by Public Law 109-171 on February 8, 2006), the rates for
vessels from Western Hemisphere ports are 4.5 cents per ton (with a
maximum of 22.5 cents per ton per year) through fiscal year 2010 and 2
cents per ton (with a maximum of 10 cents per ton per year) each year
thereafter. Per-ton rates for vessels from other foreign ports are 13.5
cents (with a maximum of 67.5 cents per ton per year) through fiscal
2010 and 6 cents (with a maximum of 30 cents per ton per year) each
year thereafter.
CBO estimates that enacting this legislation would increase
offsetting receipts from tonnage duties by about $40 million a
year between 2008 and 2012 and by about $70 million each year
thereafter through 2017. Total estimated collections over the
2008-2017 period would be $615 million (see Table 2). This
estimate is based on receipts collected from tonnage duties
before fiscal year 2002 (when those rates were temporarily
increased), adjusted for changes in shipping traffic
experienced since that time. For this estimate, CBO assumes
that shipping traffic at U.S. ports continues to grow at the
rates experienced in recent years. Like collections from the
existing duties, amounts received as a result of the proposed
increases would be deposited in the general fund of the U.S.
Treasury as offsetting receipts.
TABLE 2.--H.R. 720's CHANGES IN REVENUES AND DIRECT SPENDING
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year in millions of dollars--
--------------------------------------------------------------------------------------------------
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN REVENUES
Estimated Revenues................................... 0 * -1 -4 -13 -31 -57 -86 -108 -119 -121
CHANGES IN DIRECT SPENDING
Vessel Tonnage Charges Under Current Law:
Estimated Budget Authority....................... -34 -40 -41 -42 -18 -19 -19 -19 -20 -20 -20
Estimated Outlays................................ -34 -40 -41 -42 -18 -19 -19 -19 -20 -20 -20
Proposed Changes:
Estimated Budget Authority....................... 0 -40 -41 -41 -67 -67 -69 -71 -71 -73 -75
Estimated Outlays................................ 0 -40 -41 -41 -67 -67 -69 -71 -71 -73 -75
Vessel Tonnage Charges Under H.R. 720:
Estimated Budget Authority....................... -34 -80 -82 -83 -85 -86 -88 -90 -91 -93 -95
Estimated Outlays................................ -34 -80 -82 -83 -85 -86 -88 -90 -91 -93 -95
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note.--* = revenue loss of less than $500,000.
Spending subject to appropriation
H.R. 720 would authorize the appropriation of $14 billion
over the 2008-2012 period for EPA to provide capitalization
grants for the clean water (SRF) program. States would use such
grants along with their own funds to make low-interest loans to
communities and grants to Indian tribes to construct wastewater
treatment facilities and to fund other related projects. This
bill would make several revisions to this grant program,
including extending loan repayment terms and expanding the
types of projects eligible for assistance.
This legislation also would authorize the appropriation of
up to $375 million over the next five years for EPA to make
grants to nonprofit organizations to provide technical
assistance, such as training, to rural and small communities,
and to support research on the technologies and practices used
to treat wastewater. In addition, H.R. 720 would authorize the
appropriation of $1.5 billion over the 2008-2012 period for EPA
to make grants to states to support various activities
associated with implementing state clean water programs; this
would include paying the salaries of personnel working on water
quality issues and establishing regulations and enforcing clean
water laws.
Enacting this legislation also would authorize the
appropriation of $100 million over the 2008-2012 period for EPA
to provide technical assistance and grants for treatment
facilities to carry out pilot projects related to watershed
management.
H.R. 720 also would require the Government Accountability
Office to conduct two studies. One study would address the
funding sources available to establish a Clean Water Trust
Fund, and the other study would address alternative financing
for water infrastructure projects. CBO estimates that
completing the two studies would cost about $1 million over the
next two years, assuming the availability of appropriated
funds.
Estimated impact on state, local, and tribal governments:
H.R. 720 contains no intergovernmental mandates as defined in
UMRA. The bill would authorize grants and loans to assist
state, local, and tribal governments in protecting water
quality and enhancing water systems. Any costs that they might
incur, including matching funds, would result from complying
with conditions of federal assistance.
Estimated impact on the private sector: H.R. 720 would
impose private-sector mandates on operators of vessels entering
the United States from any foreign port or place by increasing
certain vessel tonnage duties over the 2008-2017 period. The
direct costs of complying with those mandates would be the
incremental amounts collected by the federal government as a
result of the higher rates. CBO estimates that the annual
incremental cost of those mandates would reach $68 million in
2012 and thus would fall below the annual threshold established
by UMRA ($131 million in 2007, adjusted annually for inflation)
in the first five years the mandates are in effect.
Estimate prepared by: Federal Spending: Susanne S. Mehlman
and Deborah Reis. Federal Revenues: Thomas Holtmann, Joint
Committee on Taxation. Impact on State, Local, and Tribal
Governments: Lisa Ramirez-Branum. Impact on the Private Sector:
Amy Petz.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Compliance With House Rule XXI
Pursuant to clause 9 of rule XXI of the Rules of the House
of Representatives, H.R. 720, the Water Quality Financing Act
of 2007, does not contain any congressional earmarks, limited
tax benefits, or limited tariff benefits as defined in clause
9(d), 9(e), or 9(f) of rule XXI of the Rules of the House of
Representatives.
Constitutional Authority Statement
Pursuant to clause (3)(d)(1) of rule XIII of the Rules of
the House of Representatives, committee reports on a bill or
joint resolution of a public character shall include a
statement citing the specific powers granted to the Congress in
the Constitution to enact the measure. The Committee on
Transportation and Infrastructure finds that Congress has the
authority to enact this measure pursuant to its powers granted
under Article I, section 8 of the Constitution.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act (Public Law 104-4).
Preemption Clarification
Section 423 of the Congressional Budget Act of 1974
requires the report of any Committee on a bill or joint
resolution to include a statement on the extent to which the
bill or joint resolution is intended to preempt state, local,
or tribal law. The Committee states that H.R. 720 does not
preempt any state, local, or tribal law.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act are created by this
legislation.
Applicability to the Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act (Public Law
104-1).
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
FEDERAL WATER POLLUTION CONTROL ACT
TITLE I--RESEARCH AND RELATED PROGRAMS
* * * * * * *
RESEARCH, INVESTIGATIONS, TRAINING, AND INFORMATION
Sec. 104. (a) * * *
(b) In carrying out the provisions of subsection (a) of this
section the Administrator is authorized to--
(1) * * *
* * * * * * *
(6) collect and disseminate, in cooperation with
other Federal departments and agencies, and with other
public or private agencies, institutions, and
organizations having related responsibilities, basic
data on chemical, physical, and biological effects of
varying water quality and other information pertaining
to pollution and the prevention, reduction, and
elimination thereof; [and]
(7) develop effective and practical processes,
methods, and prototype devices for the prevention,
reduction, and elimination of pollution[.]; and
(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
municipalities in the planning, developing, and
acquisition of financing for wastewater
infrastructure assistance;
(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
requirements 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 municipality is located with respect to
planning, design, construction, and operation
of publicly owned treatment works and
decentralized wastewater treatment systems.
* * * * * * *
(u) There is authorized to be appropriated (1) not to exceed
$100,000,000 per fiscal year for the fiscal year ending June
30, 1973, the fiscal year ending June 30, 1974, and the fiscal
year ending June 30, 1975, not to exceed $14,039,000 for the
fiscal year ending September 30, 1980, not to exceed
$20,697,000 for the fiscal year ending September 30, 1981, not
to exceed $22,770,000 for the fiscal year ending September 30,
1982, such sums as may be necessary for fiscal years 1983
through 1985, and not to exceed $22,770,000 per fiscal year for
each of the fiscal years 1986 through 1990, for carrying out
the provisions of this section, other than subsections (g)(1)
and (2), (p), (r), and (t), except that such authorizations are
not for any research, development, or demonstration activity
pursuant to such provisions; (2) not to exceed $7,500,000 for
fiscal years 1973, 1974, and 1975, $2,000,000 for fiscal year
1977, $3,000,000 for fiscal year 1978, $3,000,000 for fiscal
year 1979, $3,000,000 for fiscal year 1980, $3,000,000 for
fiscal year 1981, $3,000,000 for fiscal year 1982, such sums as
may be necessary for fiscal years 1983 through 1985, and
$3,000,000 per fiscal year for each of the fiscal years 1986
through 1990, for carrying out the provisions of subsection
(g)(1); (3) not to exceed $2,500,000 for fiscal years 1973,
1974, and 1975, $1,000,000 for fiscal year 1977, $1,500,000 for
fiscal year 1978, $1,500,000 for fiscal year 1979, $1,500,000
for fiscal year 1980, $1,500,000 for fiscal year 1981,
$1,500,000 for fiscal year 1982, such sums as may be necessary
for fiscal years 1983 through 1985, and $1,500,000 per fiscal
year for each of the fiscal years 1986 through 1990, for
carrying out the provisions of subsection (g)(2); (4) not to
exceed $10,000,000 for each of the fiscal years ending June 30,
1973, June 30, 1974, and June 30, 1975, for carrying out the
provisions of subsection (p); (5) not to exceed $15,000,000 per
fiscal year for the fiscal years ending June 30, 1973, June 30,
1974, and June 30, 1975, for carrying out the provisions of
subsection (r); [and (6)] (6) not to exceed $10,000,000 per
fiscal year for the fiscal years ending June 30, 1973, June 30,
1974, and June 30, 1975, for carrying out the provisions of
subsection (t); 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).
* * * * * * *
(w) Competitive Procedures for Awarding Grants.--The
Administrator shall establish procedures that, to the maximum
extent practicable, promote competition and openness in the
award of grants to nonprofit private agencies, institutions,
and organizations under this section.
* * * * * * *
GRANTS FOR POLLUTION CONTROL PROGRAMS
Sec. 106. (a) There are hereby authorized to be appropriated
the following sums, to remain available until expended, to
carry out the purposes of this section--
(1) $60,000,000 for the fiscal year ending June 30,
1973; [and]
(2) $75,000,000 for the fiscal year ending June 30,
1974, and the fiscal year ending June 30, 1975,
$100,000,000 per fiscal year for the fiscal years 1977,
1978, 1979, and 1980, $75,000,000 per fiscal year for
the fiscal years 1981 and 1982, such sums as may be
necessary for fiscal years 1983 through 1985, and
$75,000,000 per fiscal year for each of the fiscal
years 1986 through 1990; and
(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;
for grants to States and to interstate agencies to assist them
in administering programs for the prevention, reduction, and
elimination of pollution, including enforcement directly or
through appropriate State law enforcement officers or agencies.
* * * * * * *
SEC. 122. [WET WEATHER] WATERSHED PILOT PROJECTS.
(a) In General.--The Administrator, in coordination with the
States, may provide technical assistance and grants for
treatment works to carry out pilot projects relating to the
following areas of [wet weather discharge] control:
(1) * * *
(2) Stormwater best management practices.--The
control of pollutants from municipal separate storm
sewer systems for the purpose of demonstrating and
determining controls that are cost-effective and that
use innovative technologies in reducing such pollutants
from stormwater discharges, including low-impact
development technologies.
(3) Watershed partnerships.--Efforts of
municipalities and property owners to demonstrate
cooperative ways to address nonpoint sources of
pollution to reduce adverse impacts on water quality.
* * * * * * *
(c) Funding.--
(1) In general.--There is authorized to be
appropriated to carry out this section $10,000,000 for
fiscal year 2002, $15,000,000 for fiscal year 2003, and
$20,000,000 [for fiscal year 2004] for each of fiscal
years 2004 through 2012. Such funds shall remain
available until expended.
* * * * * * *
(d) Report to Congress.--Not later than [5] 10 years after
the date of enactment of this section, the Administrator shall
transmit to Congress a report on the results of the pilot
projects conducted under this section and their possible
application nationwide.
TITLE II--GRANTS FOR CONSTRUCTION OF TREATMENT WORKS
* * * * * * *
[SEWAGE COLLECTION SYSTEMS
[Sec. 211. (a) No]
SEC. 211. SEWAGE COLLECTION SYSTEMS.
(a) In General.--No grant shall be made for a sewage
collection system under this title unless such grant (1) is for
replacement or major rehabilitation of an existing collection
system and is necessary to the total integrity and performance
of the waste treatment works serving such community, or (2) is
for a new collection system in an existing community with
sufficient existing or planned capacity adequately to treat
such collected sewage and is consistent with section 201 of
this Act.
(b) Population Density._If the Administrator uses population
density as a test for determining the eligibility of a
collector sewer for assistance it shall be only for the purpose
of evaluating alternatives and determining the needs for such
system in relation to ground or surface water quality impact.
[(c) No grant shall be made under this title from funds
authorized for any fiscal year during the period beginning
October 1, 1977, and ending September 30, 1990, for treatment
works for control of pollutant discharges from separate storm
sewer systems.]
(c) Exceptions.--
(1) Replacement and major rehabilitation.--
Notwithstanding the requirement of subsection (a)(1)
concerning the existence of a collection system as a
condition of eligibility, a project for replacement or
major rehabilitation of a collection system 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 requirement of
subsection (a)(2) concerning the existence of a
community as a condition of eligibility, a project for
a new collection system to serve a community 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 requirement of
this paragraph if the purpose of the project is to
accomplish the objectives, goals, and policies of this
Act by addressing an adverse environmental condition
existing on the date of enactment of this paragraph.
DEFINITIONS
Sec. 212. As used in this title--
(1) * * *
(2)(A) The term ``treatment works'' means any devices and
systems used in the storage, treatment, recycling, and
reclamation of municipal sewage or industrial wastes of a
liquid nature to implement section 201 of this act, or
necessary to recycle or reuse water at the most economical cost
over the estimated life of the works, including intercepting
sewers, outfall sewers, sewage collection systems, pumping,
power, and other equipment, and their appurtenances;
extensions, improvements, remodeling, additions, and
alterations thereof; elements essential to provide a reliable
recycled supply such as standby treatment units and clear well
facilities; and [any works, including site] acquisition of the
land that will be an integral part of the treatment process
(including land use for the storage of treated wastewater in
land treatment systems prior to land application) or [is used
for ultimate] will be used for ultimate disposal of residues
resulting from such treatment and acquisition of other lands,
and interests in lands, which are necessary for construction.
* * * * * * *
COST EFFECTIVENESS
Sec. 218. (a) It is the policy of Congress that a project for
waste treatment and management undertaken with Federal
financial assistance under this Act by any State, municipality,
or intermunicipal or interstate agency shall be considered as
an overall waste treatment system for waste treatment and
management, and shall be that system which constitutes the most
economical and cost-effective [combination of devices and
systems used in the storage, treatment, recycling, and
reclamation of municipal sewage or industrial wastes of a
liquid nature to implement section 201 of this Act, or
necessary to recycle or reuse water at the most economical cost
over the estimated life of the works, including intercepting
sewers, outfall sewers, sewage collection systems, pumping
power, and other equipment, and their appurtenances; extension,
improvements, remodeling, additions, and alterations thereof;
elements essential to provide a reliable recycled supply such
as standby treatment units and clear well facilities; and any
works, including site acquisition of the land that will be an
integral part of the treatment process (including land use for
the storage of treated wastewater in land treatment systems
prior to land application) or which is used for ultimate
disposal of residues resulting from such treatment; water
efficiency measures and devices; and any other method or system
for preventing, abating, reducing, storing, treating,
separating, or disposing of municipal waste, including storm
water runoff, or industrial waste, including waste in combined
storm water and sanitary sewer systems; to meet the
requirements of this Act.] treatment works that meets the
requirements of this Act. The system may include water
efficiency measures and devices.
* * * * * * *
TITLE V--GENERAL PROVISIONS
* * * * * * *
GENERAL DEFINITIONS
Sec. 502. Except as otherwise specifically provided, when used
in this Act:
(1) * * *
* * * * * * *
(25) Treatment works.--The term ``treatment works'' has the
meaning given that term in section 212.
* * * * * * *
SEC. 518. INDIAN TRIBES.
(a) * * *
* * * * * * *
(c) Reservation of Funds.--[The Administrator]
(1) Fiscal years 1987-2006.--The Administrator shall
reserve each fiscal year beginning after September 30,
1986, and ending before October 1, 2006, before
allotments to the States under section 205(e), one-half
of one percent of the sums appropriated under section
207. [Sums reserved under this subsection shall be
available only for grants for the develoment of waste
treatment management plans and for the construction of
sewage treatment works to serve Indian tribes, as
defined in subsection (h) and former Indian
reservations in Oklahoma (as determined by the
Secretary of the Interior) and Alaska Native Villages
as defined in Public Law 92-203.]
(2) Fiscal year 2007 and thereafter.--For fiscal year
2007 and each fiscal year thereafter, the Administrator
shall reserve, before allotments to the States under
section 604(a), not less than 0.5 percent and not more
than 1.5 percent of the funds made available to carry
out title VI.
(3) Use of funds.--Funds reserved under this
subsection shall be available only for grants for
projects and activities eligible for assistance under
section 603(c) to serve--
(A) Indian tribes;
(B) former Indian reservations in Oklahoma
(as determined by the Secretary of the
Interior); and
(C) Native villages (as defined in section 3
of the Alaska Native Claims Settlement Act (43
U.S.C. 1602)).
* * * * * * *
TITLE VI--STATE WATER POLLUTION CONTROL REVOLVING FUNDS
SEC. 601. GRANTS TO STATES FOR ESTABLISHMENT OF REVOLVING FUNDS.
(a) General Authority.--Subject to the provisions of this
title, the Administrator shall make capitalization grants to
each State for the purpose of establishing a water pollution
control revolving fund [for providing assistance (1) for
construction of treatment works (as defined in section 212 of
this Act) which are publicly owned, (2) for implementing a
management program under section 319, and (3) for developing
and implementing a conservation and management plan under
section 320.] to accomplish the objectives, goals, and policies
of this Act by providing assistance for projects and activities
identified in section 603(c).
* * * * * * *
SEC. 602. CAPITALIZATION GRANT AGREEMENTS.
(a) * * *
(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) * * *
* * * * * * *
(9) the State will require as a condition of making a
loan or providing other assistance, as described in
section 603(d) of this Act, from the fund that the
recipient of such assistance will maintain project
accounts in accordance with generally accepted
government accounting [standards; and] standards,
including standards relating to the reporting of
infrastructure assets;
(10) the State will make annual reports to the
Administrator on the actual use of funds in accordance
with section 606(d) of this Act[.];
(11) the State will establish, maintain, invest, and
credit the fund with repayments, such that the fund
balance will be available in perpetuity for providing
financial assistance in accordance with this title;
(12) any fees charged by the State to recipients of
assistance will be used for the purpose of financing
the cost of administering the fund or financing
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
technologies for carrying out the proposed
project or activity for which assistance is
sought under this title, and has selected, to
the extent practicable, a project or activity
that may result in greater environmental
benefits or equivalent environmental benefits
when compared to standard processes, materials,
techniques, and technologies and more
efficiently uses energy and natural and
financial resources; and
(B) has considered the cost and effectiveness
of alternative management and financing
approaches 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 criteria
established by the State under section 603(i)(2) for
activities included on the State's priority list
established under section 603(g), to the extent 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 revolving fund under this
title, or both, will meet the requirements of, or
otherwise be treated (as determined by the Governor of
the State) under sections 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, construction
management, feasibility studies, preliminary
engineering, 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 determined 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
authorized 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. 603. WATER POLLUTION CONTROL REVOLVING LOAN FUNDS.
(a) * * *
* * * * * * *
[(c) Projects Eligible for Assistance.--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, intermunicipal, interstate, or State agency
for construction of publicly owned treatment works (as defined
in section 212 of this Act), (2) for the implementation of a
management program established under section 319 of this Act,
and (3) for development and implementation of a conservation
and management plan under section 320 of this Act. The fund
shall be established, maintained, and credited with repayments,
and the fund balance shall be available in perpetuity for
providing such financial assistance.]
(c) Projects and Activities Eligible for Assistance.--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
publicly 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 or reduce municipal
stormwater runoff;
(7) to any municipality or intermunicipal,
interstate, or State agency for measures to reduce the
demand for publicly owned treatment works capacity
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.
(d) Types of Assistance.--Except as otherwise limited by
State law, a water pollution control revolving fund of a State
under this section may be used only--
(1) to make loans, on the condition that--
(A) such loans are made at or below market
interest rates, including interest free loans,
at terms not to exceed [20 years] the lesser of
30 years or the design life of the project to
be financed with the proceeds of the loan;
(B) annual principal and interest payments
will commence not later than 1 year after
completion of any project and all loans will be
fully amortized [not later than 20 years after
project completion] upon the expiration of the
term of the loan;
(C) the recipient of a loan will establish a
dedicated source of revenue for repayment of
loans; [and]
(D) the fund will be credited with all
payments of principal and interest on all
loans; and
(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
treatment works;
(ii) an evaluation of the condition
and performance of inventoried assets
or asset groupings; and
(iii) a plan for maintaining,
repairing, and, as necessary, replacing
that portion of the treatment works and
a plan for funding such activities;
(6) to earn interest on fund accounts; [and]
(7) for the reasonable costs of administering the
fund and conducting activities under this title, except
that such amounts shall not exceed 4 percent of all
grant awards to such fund under this title[.], $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; and
(8) to provide owners and operators of treatment
works that serve a population of 10,000 or fewer with
technical and planning assistance and assistance in
financial management, user fee analysis, budgeting,
capital improvement planning, facility operation and
maintenance, equipment replacement, repair schedules,
and other activities to improve wastewater treatment
plant management and operations; except that such
amounts shall not exceed 2 percent of grant awards to
such fund under this title.
* * * * * * *
[(g) Priority List Requirement.--The State may provide
financial assistance from its water pollution control revolving
fund only with respect to a project for construction of a
treatment works described in subsection (c)(1) if such project
is on the State's priority list under section 216 of this Act.
Such assistance may be provided regardless of the rank of such
project on such list.]
(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 assistance is
sought from the State's water pollution control
revolving fund. Such projects and activities shall be
listed in priority order based on the methodology
established under paragraph (2). The State may provide
financial assistance from the State's water pollution
control revolving fund only with respect to a project
or activity included on such list. In the case of
projects and activities eligible for assistance under
section 603(c)(2), the State may include 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
priority list under paragraph (1).
(B) Priority for projects and activities 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) and whether such water
quality improvements would be realized without
assistance under this title.
(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 program
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 pollution
that a State may include on its priority list
under paragraph (1), the State may consider the
cumulative water quality improvements
associated with projects or activities in such
categories 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 methodology
for the purposes of this subsection.
* * * * * * *
(i) Additional Subsidization.--
(1) In general.--In any case in which a State
provides assistance to a municipality or
intermunicipal, interstate, or State agency under
subsection (d), the State may provide additional
subsidization, 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
affordability criteria if the
recipient--
(I) seeks additional
subsidization 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
assistance 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 appropriate
method) to such ratepayers; or
(B) to implement an innovative or alternative
process, material, technique, or technology
(including nonstructural protection of surface
waters, a new or improved method of waste
treatment, and pollutant trading) that may
result in greater environmental benefits, or
equivalent environmental benefits at reduced
cost, when compared to a standard process,
material, technique, or technology.
(2) Affordability criteria.--
(A) Establishment.--On or before September
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 necessary to finance a project or
activity eligible for assistance under section
603(c)(1) if additional subsidization is not
provided. Such criteria 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,
affordability criteria that meet the
requirements of subparagraph (A), the State may
use the criteria 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 criteria
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 obligation
more than $1,000,000,000 for the purposes of
this title, a State shall provide additional
subsidization under this subsection in the
amount specified in subparagraph (B) to
eligible 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 between--
(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 obligation 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 additional
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 September 30,
2007.
SEC. 604. ALLOTMENT OF FUNDS.
[(a) Formula.--Sums authorized to be appropriated to carry
out this section for each of fiscal years 1989 and 1990 shall
be allotted by the Administrator in accordance with section
205(c) of this Act.]
(a) Allotments.--
(1) Fiscal years 2008 and 2009.--Sums appropriated to
carry out this title for each of fiscal years 2008 and
2009 shall be allotted by the Administrator 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 allotted
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 subsection
(d).
(b) Reservation of Funds for Planning.--Each State shall
reserve each fiscal year [1 percent] 2 percent of the sums
allotted to such State under this section for such fiscal year,
or $100,000, whichever amount is greater, to carry out planning
under sections 205(j) and 303(e) of this Act.
* * * * * * *
-
(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. 606. AUDITS, REPORTS, AND FISCAL CONTROLS; INTENDED USE PLAN.
(a) * * *
* * * * * * *
(c) Intended Use Plan.--After providing for public comment
and review, [each State shall annually prepare] each State
(acting through the State's water quality management agency and
other appropriate agencies of the State) shall annually prepare
and publish a plan identifying the intended uses of the amounts
available to its water pollution control revolving fund. Such
intended use plan shall include, but not be limited to--
[(1) a list of those projects for construction of
publicly owned treatment works on the State's priority
list developed pursuant to section 216 of this Act and
a list of activities eligible for assistance under
sections 319 and 320 of this Act;]-
(1) the State's priority list developed under section
603(g);
* * * * * * *
-
(4) assurances and specific proposals for meeting the
requirements of paragraphs (3), (4), (5), [and (6)]
(6), (15), and (17) of section 602(b) of this Act;
[and]
(5) the criteria and method established for the
distribution of funds[.]; and
(6) if the State does not fund projects and
activities in the order of the priority established
under section 603(g), an explanation of why such a
change in order is appropriate.-
(d) Annual Report.--Beginning the first fiscal year after the
receipt of payments under this title, the State shall provide
an annual report to the Administrator describing how the State
has met the goals and objectives for the previous fiscal year
as identified in the plan prepared for the previous fiscal year
pursuant to subsection (c), including identification of loan
recipients, loan amounts, the eligible purpose under section
603(c) for which the assistance is provided, and loan terms and
similar details on other forms of financial assistance provided
from the water pollution control revolving fund.
* * * * * * *
-
SEC. 607. TECHNICAL ASSISTANCE.
(a) Simplified Procedures.--Not later than 1 year after the
date of enactment of this section, the Administrator shall
assist the States in establishing simplified procedures for
treatment works to obtain assistance under this title.
(b) Publication of Manual.--Not later than 2 years after the
date of the enactment of this section, and after providing
notice and opportunity for public comment, the Administrator
shall publish a manual to assist treatment works in obtaining
assistance under this title and publish in the Federal Register
notice of the availability of the manual.
(c) Compliance Criteria.--At the request of any State, the
Administrator, after providing notice and an opportunity for
public comment, shall assist in the development of criteria for
a State to determine compliance with the conditions of funding
assistance established under sections 602(b)(13) and
603(d)(1)(E).
SEC. [607.] 608. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to carry out the
purposes of this title the following sums:
[(1) $1,200,000,000 per fiscal year for each of
fiscal year 1989 and 1990;
[(2) $2,400,000,000 for fiscal year 1991;
[(3) $1,800,000,000 for fiscal year 1992;
[(4) $1,200,000,000 for fiscal year 1993; and
[(5) $600,000,000 for fiscal year 1994.]
(1) $2,000,000,000 for fiscal year 2008;
(2) $3,000,000,000 for fiscal year 2009;
(3) $4,000,000,000 for fiscal year 2010; and
(4) $5,000,000,000 for fiscal year 2011.
----------
TITLE 46, UNITED STATES CODE
Subtitle Sec.
GENERAL.......................................................101
* * * * * * *
[CLEARANCE, TONNAGE TAXES, AND DUTIES......................60101]
CLEARANCE AND TONNAGE DUTIES.................................60101
* * * * * * *
[Subtitle VI--Clearance, Tonnage Taxes, and Duties]
Subtitle VI--Clearance and Tonnage Duties
* * * * * * *
CHAPTER 603--TONNAGE TAXES AND LIGHT MONEY
Sec.
[60301. Regular tonnage taxes.
[60302. Special tonnage taxes.]
60301. Regular tonnage duties.
60302. Special tonnage duties.
* * * * * * *
[60304. Presidential suspension of tonnage taxes and light money.]
60304. Presidential suspension of tonnage duties and light money.
* * * * * * *
Sec. 60301. Regular tonnage [taxes] duties
[(a) Lower Rate.--A tax is imposed at the rate of 2 cents per
ton (but not more than a total of 10 cents per ton per year) at
each entry in a port of the United States of--
[(1) a vessel entering from a foreign port or place
in North America, Central America, the West Indies
Islands, the Bahama Islands, the Bermuda Islands, or
the coast of South America bordering the Caribbean Sea;
or
[(2) a vessel returning to the same port or place in
the United States from which it departed, and not
entering the United States from another port or place,
except--
[(A) a vessel of the United States;
[(B) a recreational vessel (as defined in
section 2101 of this title); or
[(C) a barge.
[(b) Higher Rate.--A tax is imposed at the rate of 6 cents
per ton (but not more than a total of 30 cents per ton per
year) on a vessel at each entry in a port of the United States
from a foreign port or place not named in subsection (a)(1).]
(a) Lower Rate.--
(1) Imposition of duty.--A duty is imposed at the
rate described in paragraph (2) at each entry in a port
of the United States of--
(A) a vessel entering from a foreign port or
place in North America, Central America, the
West Indies Islands, the Bahama Islands, the
Bermuda Islands, or the coast of South America
bordering the Caribbean Sea; or
(B) a vessel returning to the same port or
place in the United States from which it
departed, and not entering the United States
from another port or place, except--
(i) a vessel of the United States;
(ii) a recreational vessel (as
defined in section 2101 of this title);
or
(iii) a barge.
(2) Rate.--The rate referred to in paragraph (1)
shall be--
(A) 4.5 cents per ton (but not more than a
total of 22.5 cents per ton per year) for
fiscal years 2006 through 2007;
(B) 9.0 cents per ton (but not more than a
total of 45 cents per ton per year) for fiscal
years 2008 through 2017; and
(C) 2 cents per ton (but not more than a
total of 10 cents per ton per year) for each
fiscal year thereafter.
(b) Higher Rate.--
(1) Imposition of duty.--A duty is imposed at the
rate described in paragraph (2) on a vessel at each
entry in a port of the United States from a foreign
port or place not named in subsection (a)(1).
(2) Rate.--The rate referred to in paragraph (1)
shall be--
(A) 13.5 cents per ton (but not more than a
total of 67.5 cents per ton per year) for
fiscal years 2006 through 2007;
(B) 27 cents per ton (but not more than a
total of $1.35 per ton per year) for fiscal
years 2008 through 2017, and
(C) 6 cents per ton (but not more than a
total of 30 cents per ton per year) for each
fiscal year thereafter.-
(c) Exception for Vessels Entering Other Than by Sea.--
Subsection (a) does not apply to a vessel entering other than
by sea from a foreign port or place at which tonnage,
lighthouse, or other equivalent [taxes] duties are not imposed
on vessels of the United States.
Sec. 60302. Special tonnage [taxes] duties
(a) Entry From Foreign Port or Place.--Regardless of whether
a [tax] duty is imposed under section 60301 of this title, a
[tax] duty is imposed on a vessel at each entry in a port of
the United States from a foreign port or place at the following
rates:
(1) * * *
* * * * * * *
(b) Vessels Not of the United States Transporting Property
Between Districts.--Regardless of whether a [tax] duty is
imposed under section 60301 of this title, a [tax] duty of 50
cents per ton is imposed on a vessel not of the United States
at each entry in one customs district from another district
when transporting goods loaded in one district to be delivered
in another district.
(c) Exception for Vessels Becoming Documented.--The [tax]
duty of 50 cents per ton under this section does not apply to a
vessel that--
(1) is owned only by citizens of the United States;
and
(2) after entering a port of the United States,
becomes documented as a vessel of the United States
before leaving that port.
* * * * * * *
Sec. 60303. Light money
(a) Imposition of [Tax] Duty.--A [tax] duty of 50 cents per
ton, to be called ``light money'', is imposed on a vessel not
of the United States at each entry in a port of the United
States. This [tax] duty shall be imposed and collected under
the same regulations that apply to tonnage [taxes] duties.
* * * * * * *
Sec. 60304. Presidential suspension of tonnage [taxes] duties and light
money
If the President is satisfied that the government of a
foreign country does not impose discriminating or
countervailing duties to the disadvantage of the United States,
the President shall suspend the imposition of special tonnage
[taxes] duties and light money under sections 60302 and 60303
of this title on vessels of that country.
Sec. 60305. Vessels in distress
A vessel is exempt from tonnage [taxes] duties and light
money when it enters because it is in distress.
Sec. 60306. Vessels not engaged in trade
A vessel is exempt from tonnage [taxes] duties and light
money when not engaged in trade.
Sec. 60307. Vessels engaged in coastwise trade or the fisheries
A vessel with a registry endorsement or a coastwise
endorsement, trading from one port in the United States to
another port in the United States or employed in the bank,
whale, or other fisheries, is exempt from tonnage [taxes]
duties and light money.
Sec. 60308. Vessels engaged in Great Lakes trade
A documented vessel with a registry endorsement, engaged in
foreign trade on the Great Lakes or their tributary or
connecting waters in trade with Canada, does not become subject
to tonnage [taxes] duties or light money because of that trade.
Sec. 60309. Passenger vessels making trips between ports of the united
states and foreign ports
A passenger vessel making at least 3 trips per week between a
port of the United States and a foreign port is exempt from
tonnage [taxes] duties and light money.
Sec. 60310. Vessels making daily trips on interior waters
A vessel making regular daily trips between a port of the
United States and a port of Canada only on interior waters not
navigable to the ocean is exempt from tonnage [taxes] duties
and light money, except on its first clearing each year.
Sec. 60311. Hospital vessels in time of war
In time of war, a hospital vessel is exempt from tonnage
[taxes] duties, light money, and pilotage charges in the ports
of the United States if the vessel is one for which the
conditions of the international convention for the exemption of
hospital ships from taxation in time of war, concluded at The
Hague on December 21, 1904, are satisfied. The President by
proclamation shall name the vessels for which the conditions
are satisfied and state when the exemption begins and ends.
Sec. 60312. Rights under treaties preserved
This chapter and chapter 605 of this title do not affect a
right or privilege of a foreign country relating to tonnage
[taxes] duties or other duties on vessels under a law or treaty
of the United States.
* * * * * * *
MINORITY VIEWS
----------
DISSENTING VIEWS OF MR. MICA, MR. BAKER, MR. BOOZMAN, MR. BOUSTANY, MR.
BROWN (OF SOUTH CAROLINA), MR. COBLE, MR. EHLERS, MS. FALLIN, MR.
HAYES, MR. MACK, MR. MARCHANT, MR. GARY G. MILLER (OF CALIFORNIA), AND
MR. MORAN (OF KANSAS).
We recognize the important role clean water plays in our
Nation and the need for improving our critical and aging
wastewater infrastructure. By reauthorizing the Clean Water
State Revolving Loan Fund (SRF) Program, H.R. 720 takes an
important step toward addressing this need. We also welcome the
environmental improvements that this bill would bring. However,
while H.R. 720 represents an important step forward for clean
water in many respects, it also takes a significant step
backwards by mandating and expanding upon the past application
of Davis-Bacon Act prevailing wage requirements in the SRF
program.
For this reason, we opposed the bill as reported out of
Committee. These new mandated Davis-Bacon requirements are not
based on a desire to deliver clean water to communities across
the country. Rather, they would inflate the cost of clean water
projects and ultimately result in fewer projects being built,
fewer jobs being created, and less clean water being achieved.
By adding to the cost of public construction, the Davis-Bacon
Act disproportionately impacts small, rural, and disadvantaged
communities, which can least afford to pay the higher cost of
projects.
We find it difficult to comprehend how a vital national
interest and essential public health and human safety issue
could be saddled by expanding a costly component of the SRF
program that since 1987 was never intended to be applied to
non-federal funds. What we are experiencing is a pattern of
policy decisions concerning the expanded application of Davis-
Bacon to federal and non-federal programs that is more focused
on placing the interests of the public on hold and at risk,
unless an unprecedented expansion of Davis-Bacon is applied. In
the end, state's rights and local control are only further
restricted from helping solve important issues affecting
communities across America.
The Davis-Bacon Act also is discriminatory. Few small and
minority-owned firms can afford to pay the higher wages that
the Davis-Bacon Act requires. As a result, they are rarely
awarded Davis-Bacon contracts, and many of them stop applying
for those contracts. Moreover, projects operating under Davis-
Bacon requirements cannot hire local, lesser-skilled workers to
work on these infrastructure projects, thereby limiting job
opportunities for these workers and hindering state and local
efforts to provide entry-level jobs.
Prior to expiration of the Clean Water SRF authorization in
1995, only the initial Federal seed money was subject to Davis-
Bacon prevailing wage requirements. State money, including the
State match, loan repayments, interest, and other non-federal
funds were not subject to Davis-Bacon requirements. There is no
precedent here for applying the Davis-Bacon Act to state funds,
and the program has operated more efficiently and effectively
since the expiration of the prevailing wage requirements on the
Clean Water SRF. To impose such requirements on states now
would be an unnecessary and unwarranted Federal mandate on how
state funds can be spent.
For these reasons, we oppose the imposition of Davis-Bacon
Act prevailing wage requirements on the Clean Water SRF
Program, and we voted against having the Committee report H.R.
720 to the House.
Vernon J. Ehlers.
Jerry Moran.
John L. Mica.
Kenny Marchant.
Henry E. Brown, Jr.
C.W. Boustany, Jr.
Mary Fallin.
John Boozman.
Connie Mack.
Robin Hayes.
Richard H. Baker.
Gary G. Miller.
Howard Coble.