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108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-476
======================================================================
 
 AMENDING THE SAFE DRINKING WATER ACT TO REAUTHOIZE THE NEW YORK CITY 
                          WATERSHED PROTECTION

                                _______
                                

 April 28, 2004.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Barton of Texas, from the Committee on Energy and Commerce, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 2771]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 2771) to amend the Safe Drinking Water Act to 
reauthorize the New York City Watershed Protection Program, 
having considered the same, report favorably thereon without 
amendment and recommend that the bill do pass.







                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     3
Committee Consideration..........................................     4
Committee Votes..................................................     4
Committee Oversight Findings.....................................     6
Statement of General Performance Goals and Objectives............     6
New Budget Authority, Entitlement Authority, and Tax Expenditures     6
Committee Cost Estimate..........................................     6
Congressional Budget Office Estimate.............................     6
Federal Mandates Statement.......................................     8
Advisory Committee Statement.....................................     8
Constitutional Authority Statement...............................     8
Applicability to Legislative Branch..............................     8
Section-by-Section Analysis of the Legislation...................     8
Changes in Existing Law Made by the Bill, as Reported............     8
Additional Views.................................................     9

                          Purpose and Summary

    H.R. 2771 reauthorizes the New York City Watershed 
Protection Program, contained in section 1443(d)(4) of the Safe 
Drinking Water Act, through fiscal year 2010. The program 
provides for the protection and enhancement of source water for 
the New York City water supply system, including projects 
necessary for compliance with the criteria established for a 
filtration avoidance determination issued by the Environmental 
Protection Agency.

                  Background and Need for Legislation

    The New York City watershed covers an area of over 1,900 
square miles in the Catskill Mountains and the Hudson River 
Valley. The watershed is divided into two reservoir systems: 
the Catskill/Delaware watershed located West of the Hudson 
River and the Croton watershed, located East of the Hudson 
River. Together, the two reservoir systems deliver 
approximately 1.4 billion gallons of water each day to nearly 9 
million people in New York City, much of Westchester County, 
and areas of Orange, Putnam, and Ulster Counties.
    The Catskill/Delaware watershed covers 1,600 square miles 
and provides about 90 percent of New York's water supply. Water 
from the Catskill/Delaware system is ultimately collected into 
two sequential reservoirs, the Kensico and the Hillview 
reservoirs, before entering the distribution system. Drinking 
water from the Catskill/Delaware System is of high quality and 
is currently delivered to New York residents without 
conventional filtration (subject to various requirements of the 
Safe Drinking Water Act outlined below). Water from the Croton 
watershed, however, has been determined to require further 
treatment and disinfection. At present, a Draft Supplemental 
Environmental Impact Statement has been issued which outlines 
plans for a filitration plant to be built to filter this water 
supply. Three alternative sites, one in Westchester County and 
two in the Bronx, New York are under consideration for the 
filitration plant.
    Section 1412 of the Safe Drinking Water Act (42 U.S.C. 
300f-300j-9) requires the Administrator to promulgate 
regulations specifying the criteria under which filtration 
(including coagulation and sedimentation, as appropriate) is 
required as a treatment technique for public water systems 
supplied by surface water sources. However, this section also 
allows a State with primary enforcement responsibility to 
establish alternatives to filtration and for the Environmental 
Protection Agency (EPA) to approve such alternatives. In the 
case of the New York City Watershed, several reviews and 
filtration avoidance determinations (FADs) have been made for 
the Catskill/Delaware System under criteria established by EPA 
in the Surface Water Treatment Rule.
    In September 1993, New York City submitted ``New York 
City's 1993 Long-Term Watershed Protection and Filtration 
Avoidance Program'' to EPA in order to demonstrate that the 
Catskill/Delaware system could and would continue to meet 
filtration avoidance criteria. In December 1993, EPA concluded 
that New York City met the criteria for filtration avoidance 
and issued a FAD that included over 150 conditions relating to 
watershed protection, monitoring, and studies.
    In 1996, EPA re-evaluated the FAD for the New York City 
water supply system, but did not reissue this determination due 
to concern over the New York City's failure to meet several 
conditions of the 1993 program. Specifically, New York City was 
unable to obtain a land acquisition permit or approval of 
revised watershed regulations from the State of New York. It 
was also unable to upgrade wastewater treatment plans located 
outside New York City limits that were necessary to ensure 
watershed protection from point discharges of contaminants and 
excess nutrients.
    In view of this situation, the State of New York engaged 
various stakeholders in the watershed area using a consensus-
building approach to negotiate a watershed protection program. 
Pursuant to this process, in 1997, the State of New York, the 
City of New York, the EPA, the counties of Delaware, Greene, 
Schoharie, Sullivan, Ulster, Putnam, and Westchester, watershed 
municipalities, and a number of environmental groups entered 
into a watershed protection agreement, called the Watershed 
Memorandum of Agreement (MOA). EPA then issued an interim FAD, 
requiring New York City to acquire environmentally sensitive 
land in the watershed, adopt strong watershed rules and 
regulations, and institute and maintain a comprehensive 
watershed protection program. The MOA and interim FAD allowed 
the City of New York to avoid filtering its Catskill/Delaware 
drinking water provided certain preconditions were met. Upon 
meeting those conditions (e.g., NY Department of Environmental 
Conservation issuing a final land acquisition permit, NY 
Department of Health approving New York City's Watershed Rules 
and Regulations, executing the MOA, etc.) it was understood by 
the MOA parties that EPA would issue a five-year Filtration 
Avoidance Determination. The Watershed Rules and Regulations 
became effective on May 1, 1997. On May 6, 1997, EPA issued a 
five-year FAD.
    In May 2000, EPA conducted a formal mid-course review of 
the 1997 FAD and found that further actions were necessary. On 
December 15, 2001, New York State submitted a Long-Term 
Watershed Protection Program to EPA which committed to build 
substantially on the program set forth in the 1997 FAD. This 
program continued most of the existing program components, but 
provided for significant enhancements and a number of new 
program initiatives. In November 2002, EPA issued the current 
FAD for the Catskill/Delaware Water Supply system and 
established that New York City has an adequate long-term 
watershed protection program.
    H.R. 2771 would continue federal support for state and 
local efforts to protect the New York City Watershed and to 
meet the terms and conditions of the existing FAD. Authorizing 
expenditures through 2010 will lend additional certainty and 
support for the cooperative process which has been necessary to 
protect the watershed and maintain the water quality necessary 
to an FAD.

                                Hearings

    The Subcommittee on Environment and Hazardous Materials 
held a hearing on H.R. 2771 on April 2, 2004. The Subcommittee 
received testimony from: The Honorable Edolphus Towns, 
Congressman, U.S. House of Representatives; The Honorable Sue 
Kelly, Congressman, U.S. House of Representatives; Mr. Walter 
E. Mugdan, Director, Division of Environmental Planning and 
Protection, Environmental Protection Agency Region 2; Ms. Erin 
M. Crotty, Commissioner, New York Department of Environmental 
Conservation; Mr. Alan L. Rosa, Executive Director, Catskill 
Watershed Corporation; and Mr. Erik Olson, Senior Attorney, 
Natural Resources Defense Council.

                        Committee Consideration

    On Friday, April 2, 2004, the Subcommittee on Environment 
and Hazardous Materials met in open markup session and approved 
H.R. 2771 for Full Committee consideration, without amendment, 
by a record vote of 19 yeas and 7 nays, a quorum being present. 
On Thursday, April 22, 2004, the Full Committee met in open 
markup session and ordered H.R. 2771 reported to the House, 
without amendment, by a record vote of 40 yeas and 0 nays, a 
quorum being present.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
following is the recorded vote, including the names of those 
Members voting for and against, on the motion by Mr. Barton to 
order H.R. 2771 reported to the House, without amendment, as 
agreed to by a record vote of 40 yeas and 0 nays. 


                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held a legislative 
hearing and made findings that are reflected in this report.

         Statement of General Performance Goals and Objectives

    H.R. 2771 seeks to facilitate New York City's compliance 
with the requirements of its filtration avoidance determination 
by reauthorizing the New York City Watershed Protection 
Program.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
2771, to amend the Safe Drinking Water Act to reauthorize the 
New York City Watershed Protection Program, would result in no 
new or increased budget authority, entitlement authority, or 
tax expenditures or revenues.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 27, 2003.
Hon. Joe Barton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2771, a bill to 
amend the Safe Drinking Water Act to reauthorize the New York 
City Watershed Protection Program.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susanne S. 
Mehlman.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

H.R. 2771--A bill to amend the Safe Drinking Water Act to reauthorize 
        the New York City Watershed Protection Program

    Summary: H.R. 2771 would reauthorize the New York City 
Watershed Protection program for fiscal years 2004 through 2010 
and would authorize the appropriation of $15 million for the 
program each year. Authority for the program expired at the end 
of fiscal year 2003. Under the bill, the Environmental 
Protection Agency (EPA) would provide the state of New York 
with grants to assist in protecting New York City's water 
supply sources.
    CBO estimates that implementing H.R. 2771 would cost $68 
million over the 2005-2009 period, assuming appropriation of 
the authorized amounts. Enacting H.R. 2771 would not affect 
direct spending or revenues. H.R. 2771 contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 2771 is shown in the following table. 
For this estimate, CBO assumes that the bill will be enacted 
near the beginning of fiscal year 2005. Estimated outlays are 
based on historical spending patterns for the New York City 
Watershed Protection program. The costs of this legislation 
fall within budget function 300 (natural resources and 
environment).

------------------------------------------------------------------------
                                By fiscal year, in millions of dollars--
                               -----------------------------------------
                                 2004   2005   2006   2007   2008   2009
------------------------------------------------------------------------
                    SPENDING SUBJECT TO APPROPRIATION
 Spending under current law for
 New York City Watershed
 Protection:
    Budget authority..........      5      0      0      0      0      0
    Estimated outlays.........      5      3      0      0      0      0
Proposed changes:
    Authorization level.......      0     15     15     15     15     15
    Estimated outlays.........      0      8     12     15     15     15
Spending under H.R. 2771 for
 New York City Watershed
 Protection:
    Authorization level \1\...      5     15     15     15     15     15
    Estimated outlays.........      5     11     12     15     15     15
------------------------------------------------------------------------
\1\ The 2004 level is the amount appropriated for that year for the New
  York City Watershed Protection Program.

    Intergovernmental and private-sector impact: H.R. 2771 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments. The state of New York would benefit from 
federal assistance in protecting and enhancing the water supply 
system of New York City. Any costs to the state, including 
matching funds, would be conditions of aid.
    Previous CBO estimate: On August 29, 2003, CBO transmitted 
a cost estimate for S. 1425, a bill to amend the Safe Drinking 
Water Act to reauthorize the New York City Watershed Protection 
Program, as ordered reported by the Senate Committee on 
Environment and Public Works on July 30, 2003. S. 1425 would 
reauthorize the New York City Watershed Protection Program only 
for 2004 while H.R. 2771 would reauthorize the program through 
2010. CBO's cost estimates reflect that difference.
    Estimate prepared by: Federal Costs: Susanne S. Mehlman. 
Impact on State, Local, and Tribal Governments: Greg Waring. 
Impact on the Private Sector: Paige Piper/Bach.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis.

                       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.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for this legislation is provided in 
Article I, section 8, clause 3, which grants Congress the power 
to regulate commerce with foreign nations, among the several 
States, and with the Indian tribes.

                  Applicability to 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.

             Section-by-Section Analysis of the Legislation


Section 1. New York City Watershed Protection Program

    Section 1 amends section 1443(d)(4) of the Safe Drinking 
Water Act (42 U.S.C. 300j-2(d)(4)) to reauthorize the New York 
City Watershed Protection Program at its previously authorized 
funding level of $15,000,000 per fiscal year through fiscal 
year 2010.

         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):

              SECTION 1443 OF THE SAFE DRINKING WATER ACT


                       GRANTS FOR STATE PROGRAMS

    Sec. 1443. (a) * * *

           *       *       *       *       *       *       *

    (d) New York City Watershed Protection Program.--
          (1) * * *

           *       *       *       *       *       *       *

          (4) Authorization.--There are authorized to be 
        appropriated to the Administrator to carry out this 
        subsection for each of fiscal years [1997 through 2003] 
        2003 through 2010, $15,000,000 for the purpose of 
        providing assistance to the State of New York to carry 
        out paragraph (1).

                            ADDITIONAL VIEWS

    In reporting H.R. 2771, a bill to reauthorize financial 
assistance to the State of New York for demonstration projects 
implemented as part of the New York City Watershed program, the 
Committee is giving priority to only one of the 14 provisions 
of the Safe Drinking Water Act whose authorizations expired in 
2003. In selecting a minor provision of the Safe Drinking Water 
Act that benefits only one state for special treatment, the 
Committee leadership is failing to address important core 
provisions of the Act, such as the State Revolving Loan Fund 
that assists all states and helps assure that our citizens 
receive drinking water that is healthy and safe.
    The State Revolving Loan Fund authorization for $1 billion 
annually expired in 2003. The Congressional appropriation in FY 
2004 was $845 million or $155 million less than the 2003 
authorized level. If reauthorized and fully funded each of our 
states would receive an additional one to fifteen million 
dollars.
    The need for additional resources to ensure compliance with 
drinking water standards and make critical infrastructure 
improvements is beyond question. In February 2001, the EPA 
released the results of a comprehensive survey of our Nation's 
infrastructure needs. The key finding of the survey is that 
``$102.5 billion is needed now to ensure the continued 
provision of safe drinking water'' and a total of $150.9 
billion over the next 20 years. The EPA budget justification 
for FY 2003 explicitly recognized the large gap between the 
budget request and the needs of our public water system as 
follows:

          According to the Agency's 2001 Drinking Water 
        Infrastructure Needs Survey, the total 20-year national 
        infrastructure needed is $150.9 billion, $31.2 billion 
        of which is needed to ensure the provision of safe 
        drinking water under existing and recently proposed 
        regulations. The need is even more pressing in the face 
        of the projected increases of population growth and the 
        subsequent increase in demand for safe drinking water 
        over the next several decades.

    Since the submission of the FY 2003 budget, two additional 
reports have been released supporting the need for tens of 
billions of dollars of additional drinking water infrastructure 
funding.
    In April 2002, the Congressional Budget Office (CBO) 
testified before the Subcommittee on Environmental and 
Hazardous Materials that its midpoint estimate of the gap 
between what public water systems are now spending and what 
needs to be spent annually over the next 20 years is $4 billion 
a year or $80 billion over 20 years. This testimony was 
reaffirmed in a CBO Report issued May 24, 2002, entitled 
``Future Investment in Drinking Water and Wastewater 
Infrastructure.''
    On September 20, 2002, the EPA released a Clean Water and 
Drinking Water Infrastructure GAP Analysis which found that for 
drinking water the funding gap between projected spending, 
assuming no growth in revenues, was $265 billion for the 20-
year period from 2000 to 2019. Assuming an annual 3 percent 
real growth in revenues, the report indicates that the gap on 
the drinking water side could possibly be reduced to $53 
billion.
    The huge funding needs documented in the EPA and CBO 
reports are far greater than the $850 million budgeted in FY 
2005 by the Bush Administration for the state drinking water 
revolving loan fund. Local governments, states, drinking water 
suppliers, and the EPA all agree that there is a tremendous 
resource gap--which will continue to grow--for drinking water 
infrastructure funding needed to protect the public health.
    Yet the Committee has chosen to provide a new six-year 
authorization for only one small program benefiting only one 
State.
    We note that neither President Bush nor President Clinton 
has ever submitted budgets seeking appropriations for the New 
York Watershed demonstration projects. Congress has, however, 
earmarked several million dollars a year for the demonstration 
projects since 1997. The Committee is also acting without the 
benefit of the Bush Administration's views on the wisdom of a 
six-year authorization for this program alone. Further, the 
Administration witness at the hearing was a regional official 
who was not authorized to discuss the President's budget. 
Therefore, members of the Subcommittee were not able to find 
out why President Bush chose not to fund the New York 
demonstration projects in his budget.
    The New York demonstration project's annual authorization 
of $15 million represents 1.2 percent of the total $1,289,000 
in authorizations for the 14 Safe Drinking Water Act programs 
whose authorizations expired in 2003.
    The Subcommittee on Environment and Hazardous Materials has 
also failed to take action on other very important drinking 
water issues facing the country. These include the lead 
contamination in drinking water crisis in the District of 
Columbia and the need for a federal drinking water standard for 
perchlorate to ensure that the Department of Defense cleans up 
the widespread contamination from military munitions at its 
facilities. In addition, residents in Eastern Ohio and West 
Virginia have expressed serious concerns about the nature and 
extent of adverse human health effects from exposure to a 
chemical, commonly referred to as PFOA or C8, that was detected 
in local drinking water supplies along the Ohio River.
    While this measure may brings benefits to New York State, 
the Committee is failing to meet the needs of all our citizens 
by ignoring the other important core provisions of the Safe 
Drinking Water Act.

                                   John D. Dingell.
                                   Hilda L. Solis.
                                   Bobby L. Rush.
                                   Edward J. Markey.
                                   Lois Capps.
                                   Ted Strickland.
                                   Jim Davis.
                                   Jan Schakowsky.
                                   Gene Green.
                                   Bart Gordon.
                                   Peter Deutsch.
                                   Sherrod Brown.
                                   Frank Pallone, Jr.
                                   Anna Eshoo.
                                   Karen McCarthy.
                                   Bart Stupak.
                                   Albert R. Wynn.
                                   Charles A. Gonzalez.
                                   Tom Allen.
                                   Mike Doyle.
                                   Diana DeGette.
                                   Henry A. Waxman.