H. Rept. 111-26 - 111th Congress (2009-2010)

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House Report 111-26 - WATER QUALITY INVESTMENT ACT OF 2009

[House Report 111-26]
[From the U.S. Government Publishing Office]



111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     111-26

======================================================================



 
                  WATER QUALITY INVESTMENT ACT OF 2009

                                _______
                                

 March 9, 2009.--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. 1262]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Transportation and Infrastructure, to whom 
was referred the bill (H.R. 1262) 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 
Investment Act of 2009''.
  (b) Table of Contents.--

 1. Short title; table of contents.
 2. Amendment of Federal Water Pollution Control Act.

                    TITLE I--WATER QUALITY FINANCING

            Subtitle A--Technical and Management Assistance

 1101. Technical assistance.
 1102. State management assistance.
 1103. Watershed pilot projects.

              Subtitle B--Construction of Treatment Works

 1201. Sewage collection systems.
 1202. Treatment works defined.

       Subtitle C--State Water Pollution Control Revolving Funds

 1301. General authority for capitalization grants.
 1302. Capitalization grant agreements.
 1303. Water pollution control revolving loan funds.
 1304. Allotment of funds.
 1305. Intended use plan.
 1306. Annual reports.
 1307. Technical assistance; requirements for use of American 
materials.
 1308. Authorization of appropriations.

                     Subtitle D--General Provisions

 1401. Definition of treatment works.
 1402. Funding for Indian programs.

                       Subtitle E--Tonnage Duties

 1501. Tonnage duties.

              TITLE II--ALTERNATIVE WATER SOURCE PROJECTS

 2001. Pilot program for alternative water source projects.

                TITLE III--SEWER OVERFLOW CONTROL GRANTS

 3001. Sewer overflow control grants.

   TITLE IV--MONITORING, REPORTING, AND PUBLIC NOTIFICATION OF SEWER 
                               OVERFLOWS

 4001. Monitoring, reporting, and public notification of sewer 
overflows.

              TITLE V--GREAT LAKES LEGACY REAUTHORIZATION

 5001. Remediation of sediment contamination in areas of concern.
 5002. Public information program.
 5003. Contaminated sediment remediation approaches, technologies, and 
techniques.

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--WATER QUALITY FINANCING

            Subtitle A--Technical and Management Assistance

SEC. 1101. 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 eligible 
                projects described in section 603(c);
                  ``(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 $100,000,000 for each of fiscal years 
        2010 through 2014 for carrying out subsections (b)(3), (b)(8), 
        and (g), 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) Small Flows Clearinghouse.--Section 104(q)(4) (33 U.S.C. 
1254(q)(4)) is amended--
          (1) in the first sentence by striking ``$1,000,000'' and 
        inserting ``$3,000,000''; and
          (2) in the second sentence by striking ``1986'' and inserting 
        ``2011''.

SEC. 1102. 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 2009, and $300,000,000 for each of fiscal years 
        2010 through 2014;''.

SEC. 1103. 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 striking ``in reducing such 
                pollutants'' and all that follows before the period at 
                the end and inserting ``to manage, reduce, treat, or 
                reuse municipal stormwater, including low-impact 
                development technologies''; 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.
          ``(4) Integrated water resource plan.--The development of an 
        integrated water resource plan for the coordinated management 
        and protection of surface water, ground water, and stormwater 
        resources on a watershed or subwatershed basis to meet the 
        objectives, goals, and policies of this Act.''.
  (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 2014''.
  (c) Report to Congress.--Section 122(d) is amended by striking ``5 
years after the date of enactment of this section,'' and inserting 
``October 1, 2011,''.

              Subtitle B--Construction of Treatment Works

SEC. 1201. SEWAGE COLLECTION SYSTEMS.

  Section 211 (33 U.S.C. 1291) is amended--
          (1) by striking the section heading 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. 1202. 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''.

       Subtitle C--State Water Pollution Control Revolving Funds

SEC. 1301. 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. 1302. 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) in paragraph (6)--
                  (A) by striking ``before fiscal year 1995'';
                  (B) by striking ``funds directly made available by 
                capitalization grants under this title and section 
                205(m) of this Act'' and inserting ``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,''; and
                  (C) by striking ``201(b)'' and all that follows 
                through ``513'' and inserting ``211 and 511(c)(1)'';
          (2) by striking ``and'' at the end of paragraph (9);
          (3) by striking the period at the end of paragraph (10) and 
        inserting a semicolon; and
          (4) 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 that are considered program income 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 2011, 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 the 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 maximizes the potential for 
                efficient water use, reuse, and conservation, and 
                energy conservation, taking into account the cost of 
                constructing the project or activity, the cost of 
                operating and maintaining the project or activity over 
                its life, and the cost of replacing the project or 
                activity; and
                  ``(B) has considered, to the maximum extent 
                practicable and as determined appropriate by the 
                recipient, the costs and effectiveness of other design, 
                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 
                constructing the project or activity, the cost of 
                operating and maintaining the project or activity over 
                its life, and the cost of replacing the project or 
                activity;
          ``(14) the State will use at least 10 percent of the amount 
        of each capitalization grant received by the State under this 
        title after September 30, 2010, 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) 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
          ``(16) 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. 1303. 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, reduce, treat, or reuse 
        municipal stormwater, agricultural stormwater, and return flows 
        from irrigated agriculture;
          ``(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; and
          ``(8) 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 a semicolon; and
          (3) by adding at the end the following:
          ``(8) to provide grants to owners and operators of treatment 
        works that serve a population of 10,000 or fewer for obtaining 
        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 the total amount provided by the State in grants under 
        this paragraph for a fiscal year may not exceed one percent of 
        the total amount of assistance provided by the State from the 
        fund in the preceding fiscal year, or 2 percent of the total 
        amount received by the State in capitalization grants under 
        this title in the preceding fiscal year, whichever amount is 
        greatest; and
          ``(9) to provide grants to owners and operators of treatment 
        works for conducting an assessment of the energy and water 
        consumption of the treatment works, and evaluating potential 
        opportunities for energy and water conservation through 
        facility operation and maintenance, equipment replacement, and 
        projects or activities that promote the efficient use of energy 
        and water by the treatment works, except that the total amount 
        provided by the State in grants under this paragraph for a 
        fiscal year may not exceed one percent of the total amount of 
        assistance provided by the State from the fund in the preceding 
        fiscal year, or 2 percent of the total amount received by the 
        State in capitalization grants under this title in the 
        preceding fiscal year, whichever amount is greatest.''.
  (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 a process, material, technique, or 
                technology to address water-efficiency goals, address 
                energy-efficiency goals, mitigate stormwater runoff, or 
                encourage environmentally sensitive project planning, 
                design, and construction.
          ``(2) Affordability criteria.--
                  ``(A) Establishment.--On or before September 30, 
                2010, 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, 2009.''.

SEC. 1304. 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 2010 and 2011.--Sums appropriated to carry 
        out this title for each of fiscal years 2010 and 2011 shall be 
        allotted by the Administrator in accordance with the formula 
        used to allot sums appropriated to carry out this title for 
        fiscal year 2009.
          ``(2) Fiscal year 2012 and thereafter.--Sums appropriated to 
        carry out this title for fiscal year 2012 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, 2011, 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. 1305. 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 2011 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), whether 
                such water quality improvements would be realized 
                without assistance under this title, and whether the 
                proposed projects and activities would address water 
                quality impairments associated with existing treatment 
                works.
                  ``(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 shall 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. 1306. 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. 1307. TECHNICAL ASSISTANCE; REQUIREMENTS FOR USE OF AMERICAN 
                    MATERIALS.

  Title VI (33 U.S.C. 1381 et seq.) is amended--
          (1) by redesignating section 607 as section 609; 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. 608. REQUIREMENTS FOR USE OF AMERICAN MATERIALS.

  ``(a) In General.--Notwithstanding any other provision of law, none 
of the funds made available by a State water pollution control 
revolving fund as authorized under this title may be used for the 
construction of treatment works unless the steel, iron, and 
manufactured goods used in such treatment works are produced in the 
United States.
  ``(b) Exceptions.--Subsection (a) shall not apply in any case in 
which the Administrator (in consultation with the Governor of the 
State) finds that--
          ``(1) applying subsection (a) would be inconsistent with the 
        public interest;
          ``(2) steel, iron, and manufactured goods are not produced in 
        the United States in sufficient and reasonably available 
        quantities and of a satisfactory quality; or
          ``(3) inclusion of steel, iron, and manufactured goods 
        produced in the United States will increase the cost of the 
        overall project by more than 25 percent.
  ``(c) Public Notification and Written Justification for Waiver.--If 
the Administrator determines that it is necessary to waive the 
application of subsection (a) based on a finding under subsection (b), 
the Administrator shall--
          ``(1) not less than 15 days prior to waiving application of 
        subsection (a), provide public notice and the opportunity to 
        comment on the Administrator's intent to issue such waiver; and
          ``(2) upon issuing such waiver, publish in the Federal 
        Register a detailed written justification as to why the 
        provision is being waived.
  ``(d) Consistency With International Agreements.--This section shall 
be applied in a manner consistent with United States obligations under 
international agreements.''.

SEC. 1308. AUTHORIZATION OF APPROPRIATIONS.

  Section 609 (as redesignated by section 1307 of this Act) is amended 
by striking paragraphs (1) through (5) and inserting the following:
          ``(1) $2,400,000,000 for fiscal year 2010;
          ``(2) $2,700,000,000 for fiscal year 2011;
          ``(3) $2,800,000,000 for fiscal year 2012;
          ``(4) $2,900,000,000 for fiscal year 2013; and
          ``(5) $3,000,000,000 for fiscal year 2014.''.

                     Subtitle D--General Provisions

SEC. 1401. DEFINITION OF TREATMENT WORKS.

  Section 502 (33 U.S.C. 1362) is amended by adding at the end the 
following:
          ``(26) Treatment works.--The term `treatment works' has the 
        meaning given that term in section 212.''.

SEC. 1402. 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 1987-2008.--The Administrator'';
          (2) in paragraph (1) (as so designated)--
                  (A) by inserting ``and ending before October 1, 
                2008,'' after ``1986,''; and
                  (B) by striking the second sentence; and
          (3) by adding at the end the following:
          ``(2) Fiscal year 2009 and thereafter.--For fiscal year 2009 
        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 (as defined in section 518(h));
                  ``(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)).''.

                       Subtitle E--Tonnage Duties

SEC. 1501. TONNAGE DUTIES.

  (a) In General.--Section 60301 of title 46, United State Code, is 
amended by striking subsections (a) and (b) and inserting the 
following:
  ``(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 2009;
                  ``(B) 9.0 cents per ton (but not more than a total of 
                45 cents per ton per year) for fiscal years 2010 
                through 2019; 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 2009;
                  ``(B) 27 cents per ton (but not more than a total of 
                $1.35 per ton per year) for fiscal years 2010 through 
                2019, and
                  ``(C) 6 cents per ton (but not more than a total of 
                30 cents per ton per year) for each fiscal year 
                thereafter.''.
  (b) Liability in Rem.--Chapter 603 of title 46, United States Code, 
is amended by adding at the end the following:

``Sec. 60313. Liability in rem for costs

  ``A vessel is liable in rem for any amount due under this chapter for 
that vessel and may be proceeded against for that liability in the 
United States district court for any district in which the vessel may 
be found.''.
  (c) 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 heading for chapter 603, by striking ``TAXES'' and 
        inserting ``DUTIES'';
          (3) in the headings of sections in chapter 603, by striking 
        ``taxes'' each place it appears and inserting ``duties'';
          (4) in the heading for subsection (a) of section 60303, by 
        striking ``Tax'' and inserting ``Duty'';
          (5) in the text of sections in chapter 603, by striking 
        ``taxes'' each place it appears and inserting ``duties''; and
          (6) in the text of sections in chapter 603, by striking 
        ``tax'' each place it appears and inserting ``duty''.
  (d) 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'';

          (2) in the analysis for subtitle VI by striking the item 
        relating to chapter 603 and inserting the following:

``603. Tonnage Duties and Light Money.......................   60301'';

        and
          (3) 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.'';

                  (B) by striking the item relating to section 60304 
                and inserting the following:

``60304. Presidential suspension of tonnage duties and light money.'';

        and
                  (C) by adding at the end the following:

``60313. Liability in rem for costs.''.

              TITLE II--ALTERNATIVE WATER SOURCE PROJECTS

SEC. 2001. PILOT PROGRAM FOR ALTERNATIVE WATER SOURCE PROJECTS.

  (a) Selection of Projects.--Section 220(d)(2) (33 U.S.C. 1300(d)(2)) 
is amended by inserting before the period at the end the following: 
``or whether the project is located in an area which is served by a 
public water system serving 10,000 individuals or fewer''.
  (b) Authorization of Appropriations.--Section 220(j) (33 U.S.C. 
1300(j)) is amended by striking ``$75,000,000 for fiscal years 2002 
through 2004'' and inserting ``$50,000,000 for each of fiscal years 
2010 through 2014''.

                TITLE III--SEWER OVERFLOW CONTROL GRANTS

SEC. 3001. SEWER OVERFLOW CONTROL GRANTS.

  (a) Administrative Requirements.--Section 221(e) (33 U.S.C. 1301(e)) 
is amended to read as follows:
  ``(e) Administrative Requirements.--A project that receives 
assistance under this section shall be carried out subject to the same 
requirements as a project that receives assistance from a State water 
pollution control revolving fund under title VI, except to the extent 
that the Governor of the State in which the project is located 
determines that a requirement of title VI is inconsistent with the 
purposes of this section.''.
  (b) Authorization of Appropriations.--The first sentence of section 
221(f) (33 U.S.C. 1301(f)) is amended by striking ``this section 
$750,000,000'' and all that follows through the period at the end and 
inserting ``this section $250,000,000 for fiscal year 2010, 
$300,000,000 for fiscal year 2011, $350,000,000 for fiscal year 2012, 
$400,000,000 for fiscal year 2013, and $500,000,000 for fiscal year 
2014.''.
  (c) Allocation of Funds.--Section 221(g) of such Act (33 U.S.C. 
1301(g)) is amended to read as follows:
  ``(g) Allocation of Funds.--
          ``(1) Fiscal year 2010.--Subject to subsection (h), the 
        Administrator shall use the amounts appropriated to carry out 
        this section for fiscal year 2010 for making grants to 
        municipalities and municipal entities under subsection (a)(2) 
        in accordance with the criteria set forth in subsection (b).
          ``(2) Fiscal year 2011 and thereafter.--Subject to subsection 
        (h), the Administrator shall use the amounts appropriated to 
        carry out this section for fiscal year 2011 and each fiscal 
        year thereafter for making grants to States under subsection 
        (a)(1) in accordance with a formula to be established by the 
        Administrator, after providing notice and an opportunity for 
        public comment, that allocates to each State a proportional 
        share of such amounts based on the total needs of the State for 
        municipal combined sewer overflow controls and sanitary sewer 
        overflow controls identified in the most recent survey 
        conducted pursuant to section 516.''.
  (d) Reports.--The first sentence of section 221(i) (33 U.S.C. 
1301(i)) is amended by striking ``2003'' and inserting ``2012''.

   TITLE IV--MONITORING, REPORTING, AND PUBLIC NOTIFICATION OF SEWER 
                               OVERFLOWS

SEC. 4001. MONITORING, REPORTING, AND PUBLIC NOTIFICATION OF SEWER 
                    OVERFLOWS.

  Section 402 (33 U.S.C. 1342) is amended by adding at the end the 
following:
  ``(s) Sewer Overflow Monitoring, Reporting, and Notifications.--
          ``(1) General requirements.--After the last day of the 180-
        day period beginning on the date on which regulations are 
        issued under paragraph (4), a permit issued, renewed, or 
        modified under this section by the Administrator or the State, 
        as the case may be, for a publicly owned treatment works shall 
        require, at a minimum, beginning on the date of the issuance, 
        modification, or renewal, that the owner or operator of the 
        treatment works--
                  ``(A) institute and utilize a feasible methodology, 
                technology, or management program for monitoring sewer 
                overflows to alert the owner or operator to the 
                occurrence of a sewer overflow in a timely manner;
                  ``(B) in the case of a sewer overflow that has the 
                potential to affect human health, notify the public of 
                the overflow as soon as practicable but not later than 
                24 hours after the time the owner or operator knows of 
                the overflow;
                  ``(C) in the case of a sewer overflow that may 
                imminently and substantially endanger human health, 
                notify public health authorities and other affected 
                entities, such as public water systems, of the overflow 
                immediately after the owner or operator knows of the 
                overflow;
                  ``(D) report each sewer overflow on its discharge 
                monitoring report to the Administrator or the State, as 
                the case may be, by describing--
                          ``(i) the magnitude, duration, and suspected 
                        cause of the overflow;
                          ``(ii) the steps taken or planned to reduce, 
                        eliminate, or prevent recurrence of the 
                        overflow; and
                          ``(iii) the steps taken or planned to 
                        mitigate the impact of the overflow; and
                  ``(E) annually report to the Administrator or the 
                State, as the case may be, the total number of sewer 
                overflows in a calendar year, including--
                          ``(i) the details of how much wastewater was 
                        released per incident;
                          ``(ii) the duration of each sewer overflow;
                          ``(iii) the location of the overflow and any 
                        potentially affected receiving waters;
                          ``(iv) the responses taken to clean up the 
                        overflow; and
                          ``(v) the actions taken to mitigate impacts 
                        and avoid further sewer overflows at the site.
          ``(2) Exceptions.--
                  ``(A) Notification requirements.--The notification 
                requirements of paragraphs (1)(B) and (1)(C) shall not 
                apply to a sewer overflow that is a wastewater backup 
                into a single-family residence.
                  ``(B) Reporting requirements.--The reporting 
                requirements of paragraphs (1)(D) and (1)(E) shall not 
                apply to a sewer overflow that is a release of 
                wastewater that occurs in the course of maintenance of 
                the treatment works, is managed consistently with the 
                treatment works' best management practices, and is 
                intended to prevent sewer overflows.
          ``(3) Report to epa.--Each State shall provide to the 
        Administrator annually a summary of sewer overflows that 
        occurred in the State.
          ``(4) Rulemaking by epa.--Not later than one year after the 
        date of enactment of this subsection, the Administrator, after 
        providing notice and an opportunity for public comment, shall 
        issue regulations to implement this subsection, including 
        regulations to--
                  ``(A) establish a set of criteria to guide the owner 
                or operator of a publicly owned treatment works in--
                          ``(i) assessing whether a sewer overflow has 
                        the potential to affect human health or may 
                        imminently and substantially endanger human 
                        health; and
                          ``(ii) developing communication measures that 
                        are sufficient to give notice under paragraphs 
                        (1)(B) and (1)(C); and
                  ``(B) define the terms `feasible' and `timely' as 
                such terms apply to paragraph (1)(A), including site 
                specific conditions.
          ``(5) Approval of state notification programs.--
                  ``(A) Requests for approval.--
                          ``(i) In general.--After the date of issuance 
                        of regulations under paragraph (4), a State may 
                        submit to the Administrator evidence that the 
                        State has in place a legally enforceable 
                        notification program that is substantially 
                        equivalent to or exceeds the requirements of 
                        paragraphs (1)(B) and (1)(C).
                          ``(ii) Program review and authorization.--If 
                        the evidence submitted by a State under clause 
                        (i) shows the notification program of the State 
                        to be substantially equivalent to or exceeds 
                        the requirements of paragraphs (1)(B) and 
                        (1)(C), the Administrator shall authorize the 
                        State to carry out such program instead of the 
                        requirements of paragraphs (1)(B) and (1)(C).
                          ``(iii) Factors for determining substantial 
                        equivalency.--In carrying out a review of a 
                        State notification program under clause (ii), 
                        the Administrator shall take into account the 
                        scope of sewer overflows for which notification 
                        is required, the length of time during which 
                        notification must be made, the scope of persons 
                        who must be notified of sewer overflows, the 
                        scope of enforcement activities ensuring that 
                        notifications of sewer overflows are made, and 
                        such other factors as the Administrator 
                        considers appropriate.
                  ``(B) Review period.--If a State submits evidence 
                with respect to a notification program under 
                subparagraph (A)(i) on or before the last day of the 
                30-day period beginning on the date of issuance of 
                regulations under paragraph (4), the requirements of 
                paragraphs (1)(B) and (1)(C) shall not begin to apply 
                to a publicly owned treatment works located in the 
                State until the date on which the Administrator 
                completes a review of the notification program under 
                subparagraph (A)(ii).
                  ``(C) Withdrawal of authorization.--If the 
                Administrator, after conducting a public hearing, 
                determines that a State is not administering and 
                enforcing a State notification program authorized under 
                subparagraph (A)(ii) in accordance with the 
                requirements of this paragraph, the Administrator shall 
                so notify the State and, if appropriate corrective 
                action is not taken within a reasonable time, not to 
                exceed 90 days, the Administrator shall withdraw 
                authorization of such program and enforce the 
                requirements of paragraphs (1)(B) and (1)(C) with 
                respect to the State.
          ``(6) Special rules concerning application of notification 
        requirements.--After the last day of the 30-day period 
        beginning on the date of issuance of regulations under 
        paragraph (4), the requirements of paragraphs (1)(B) and (1)(C) 
        shall--
                  ``(A) apply to the owner or operator of a publicly 
                owned treatment works and be subject to enforcement 
                under section 309, and
                  ``(B) supersede any notification requirements 
                contained in a permit issued under this section for the 
                treatment works to the extent that the notification 
                requirements are less stringent than the notification 
                requirements of paragraphs (1)(B) and (1)(C),
        until such date as a permit is issued, renewed, or modified 
        under this section for the treatment works in accordance with 
        paragraph (1).
          ``(7) Definitions.--In this subsection, the following 
        definitions apply:
                  ``(A) Sanitary sewer overflow.--The term `sanitary 
                sewer overflow' means an overflow, spill, release, or 
                diversion of wastewater from a sanitary sewer system. 
                Such term does not include municipal combined sewer 
                overflows or other discharges from the combined portion 
                of a municipal combined storm and sanitary sewer system 
                and does not include wastewater backups into buildings 
                caused by a blockage or other malfunction of a building 
                lateral that is privately owned. Such term includes 
                overflows or releases of wastewater that reach waters 
                of the United States, overflows or releases of 
                wastewater in the United States that do not reach 
                waters of the United States, and wastewater backups 
                into buildings that are caused by blockages or flow 
                conditions in a sanitary sewer other than a building 
                lateral.
                  ``(B) Sewer overflow.--The term `sewer overflow' 
                means a sanitary sewer overflow or a municipal combined 
                sewer overflow.
                  ``(C) Single-family residence.--The term `single-
                family residence' means an individual dwelling unit, 
                including an apartment, condominium, house, or 
                dormitory. Such term does not include the common areas 
                of a multi-dwelling structure.''.

              TITLE V--GREAT LAKES LEGACY REAUTHORIZATION

SEC. 5001. REMEDIATION OF SEDIMENT CONTAMINATION IN AREAS OF CONCERN.

  Section 118(c)(12)(H) of the Federal Water Pollution Control Act (33 
U.S.C. 1268(c)(12)(H)) is amended by striking clause (i) and inserting 
the following:
                          ``(i) In general.--In addition to other 
                        amounts authorized under this section, there is 
                        authorized to be appropriated to carry out this 
                        paragraph--
                                  ``(I) $50,000,000 for each of the 
                                fiscal years 2004 through 2009; and
                                  ``(II) $150,000,000 for each of the 
                                fiscal years 2010 through 2014.''.

SEC. 5002. PUBLIC INFORMATION PROGRAM.

  Section 118(c)(13)(B) (33 U.S.C. 1268(c)(13)(B)) is amended by 
striking ``2010'' and inserting ``2014''.

SEC. 5003. CONTAMINATED SEDIMENT REMEDIATION APPROACHES, TECHNOLOGIES, 
                    AND TECHNIQUES.

  Section 106(b) of the Great Lakes Legacy Act of 2002 (33 U.S.C. 
1271a(b)) is amended by striking paragraph (1) and inserting the 
following:
          ``(1) In general.--In addition to amounts authorized under 
        other laws, there is authorized to be appropriated to carry out 
        this section--
                  ``(A) $3,000,000 for each of the fiscal years 2004 
                through 2009; and
                  ``(B) $5,000,000 for each of the fiscal years 2010 
                through 2014.''.

                       Purpose of the Legislation

    H.R. 1262 , the ``Water Quality Investment Act of 2009'', 
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; to reauthorize appropriations for the 
Environmental Protection Agency (``EPA'') to provide grants for 
alternative water source projects to meet critical water supply 
needs; to reauthorize appropriations for grants to 
municipalities and States to control combined sewer overflows 
and sanitary sewer overflows; to provide a uniform, national 
standard for monitoring, reporting, and public notification of 
municipal combined sewer overflows and sanitary sewer 
overflows; and to reauthorize and increase appropriations for 
projects to remediate contaminated sediment in the Great Lakes 
areas of concern.

                  Background and Need for Legislation

    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.

 REAUTHORIZATION OF APPROPRIATIONS FOR THE CLEAN WATER STATE REVOLVING 
                                  FUND

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 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 sewers are found in 33 States across the 
U.S. and the District of Columbia. 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 2004 Report to Congress, the existing documented needs 
for the nation are $202.5 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 Clean 
Water 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.
    Finally, over the last decade, innovative technologies have 
emerged that provide similar (or increased) benefits to 
traditional wastewater infrastructure projects, but in a more 
cost-effective, sustainable, and environmentally-sensitive 
manner. These technologies, such as on-site source controls to 
capture stormwater, pervious pavement, green roofs, stream 
buffers, and other water reuse technologies, mimic natural 
processes to protect and enhance environmental quality, reduce 
wet-weather related ``peak'' loads, and promote water 
conservation and reuse. When used independently, or in 
conjunction with other traditional treatment technologies, the 
use of water-efficient technologies can provide the same, or 
greater, water quality benefits at a reduced cost, both in 
terms of capital investment and long-term operation and 
maintenance. For example, a 2007 EPA report, entitled Reducing 
Stormwater Costs through Low Impact Development (LID) 
Strategies and Practices, found that total capital cost savings 
ranged from 15 to 80 percent when LID methods were used when 
compared to conventional stormwater management costs.
    In the same manner, investment in technologies that improve 
the overall energy-efficiency of a publicly owned wastewater 
treatment facility will enable owners and operators of such 
facilities to provide their essential services in a more cost-
effective, and environmentally-sensitive manner. As noted in a 
recent hearing of the Subcommittee on Water Resources and 
Environment, the potential for energy conservation and 
operation and maintenance cost savings from implementation of 
energy-efficient technologies are substantial--including energy 
savings ranging from between 10 and 30 percent for the 
replacement and upgrading of existing components (e.g., aerator 
pumps and motors) to the potential for a treatment facility to 
generate 100 percent of its own power from the use of biogas 
(i.e., methane recapture), cogeneration (i.e., combined heat 
and power), or renewable sources of energy (e.g., wind and 
solar).
    Several witnesses at a February 2009 hearing of the 
Subcommittee identified potential barriers to the comprehensive 
implementation of water- and energy-efficient technologies for 
wastewater treatment plants. Chief among these barriers are a 
lack of information on the potential cost savings and 
environmental benefit from implementation of water- and energy-
efficient technologies, as well as the reality that certain 
water- and energy-efficient technologies may represent non-
traditional ways of addressing wastewater treatment and, 
therefore, require additional financial incentives to be 
undertaken by local communities.

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 2007, the Clean Water SRFs have 
provided $63 billion in loans for wastewater projects, 
including nearly $5.3 billion in loans in FY 2007 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.

              GRANTS FOR ALTERNATIVE WATER SOURCE PROJECTS

    In recent years, there has been increasing interest by 
communities across the nation and by Congress in ensuring the 
availability of water sources to meet future water supply 
needs. Growth in population and increasing environmental 
awareness are causing many communities to explore alternative 
water supplies through reclamation, reuse, and conservation.
    While the initial Clean Water Act Construction Grants 
program, and the Clean Water SRFs have been available for such 
activities, most expenditures to date have been for more 
traditional wastewater projects, and not for enhancing water 
supplies through wastewater reuse and water recycling.
    To provide Federal assistance, in 2000, Congress amended 
the Clean Water Act to add section 220 (Title VI of Pub. L. 
106-457). Section 220 authorized appropriations of $75 million 
for fiscal years 2002 through 2004 for EPA to make grants for 
alternative water source projects to entities with authority 
under State law to develop or provide water for municipal and 
industrial or agricultural uses in areas that are experiencing 
critical water supply needs, with a non-Federal cost share of 
50 percent. This authorization has expired. Reauthorization of 
section 220 of the Clean Water Act provides an authority to 
help meet some of the critical water supply needs around the 
nation.

 GRANTS FOR THE CONTROL OF COMBINED SEWER OVERFLOWS AND SANITARY SEWER 
                               OVERFLOWS

    Municipal wastewater collection systems collect domestic 
sewage and other wastewater from homes and other buildings and 
convey it to wastewater treatment plants for proper treatment 
and disposal. These collection systems and treatment facilities 
are an extensive, valuable, and complex part of the nation's 
infrastructure. Sewage treatment operators perform an important 
job that helps protect the public, and are critical in 
achieving the goals of the Clean Water Act. The collection and 
treatment of domestic sewage and other wastewater is vital to 
the nation's economic and public health and the protection of 
the environment.
    Two types of public sewer systems predominate in the United 
States--combined sewer systems and separate sanitary sewer 
systems. Municipal combined sewer systems utilize a joint-
conveyance for the movement of wastewater (e.g., domestic 
sewage) and stormwater to wastewater treatment facilities. 
Separate sanitary sewer systems have individual (separated) 
conveyances for the movement of domestic sewage and for 
stormwater.
    Combined sewer systems, which carry both storm water and 
sanitary (sewage) flows, and separate sanitary sewer systems 
can overflow with untreated waste during wet weather episodes 
such as rainfall or snow melts. These combined sewer overflows 
(``CSOs'') and sanitary sewer overflows (``SSOs'') may also 
occur outside of precipitation events because of insufficient 
system capacity, poor system design, inadequate maintenance, 
inflow from improper connections to the system, and 
infiltration from groundwater into deteriorated pipes, among 
other factors.
    CSOs and SSOs present significant public health and safety 
concerns because raw sewage can overflow into rivers, lakes, 
streets, parks, basements, and other areas of potential human 
exposure, adversely impacting public health and the 
environment. These discharges are among the major sources 
responsible for beach closures, shellfish restrictions, and 
exceedances of water quality standards.

Combined sewer overflows

    According to a December 2001 EPA Report to Congress, there 
are 772 communities across the United States that have combined 
sewer systems. These combined sewer systems have 9,471 built-in 
relief outlets designed to prevent wastewater flows in excess 
of system capacity from damaging the systems' treatment works, 
by allowing wastewater discharges (``overflows'') directly into 
nearby streams, rivers, lakes, or estuaries, instead of going 
to the treatment works. Combined sewers are found in 31 States 
across the U.S. and the District of Columbia. The majority of 
combined sewers are located in communities in the Northeast and 
the 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.
    EPA has also estimated that more than 40,000 SSOs per year 
occur from the nation's 19,500 separate sanitary sewer systems. 
SSOs can have a major impact on human health and the 
environment through discharges into neighborhood streets, 
parks, individual homeowner basements, and other areas.
    CSOs are point source discharges regulated under the Clean 
Water Act, and are subject to permitting under the National 
Pollutant Discharge Elimination System (NPDES) by EPA or 
authorized States. Permits include technology-based standards 
determined on a case-by-case basis (rather than categorical 
standards) and any appropriate water quality standards. Under 
the Combined Sewer Overflow Control Policy issued by EPA in 
1994 (59 Fed. Reg. 18688) (``CSO Control Policy''), communities 
must adopt nine minimum controls and must develop long-term 
control plans. The CSO Control Policy requires these controls 
and plans to be incorporated into an NPDES permit or other 
enforceable mechanism that will ensure implementation by the 
CSO community. Section 402(q) of the Clean Water Act requires 
each permit, order, or decree issued after December 21, 2000, 
for a discharge from a municipal combined storm and sanitary 
sewer to conform to the CSO Control Policy.

Sanitary sewer overflows

    Since the first part of the 20th Century, municipalities in 
the United States have generally constructed separate sanitary 
and stormwater sewer systems. Sanitary sewer systems are 
specifically designed to carry domestic sewage flows and 
stormwater runoff from precipitation events through different 
conveyances.
    While sanitary sewer systems are designed to separate 
sewage from stormwater, sewer overflows from separated systems 
still may occur. Unlike CSOs, which are typically designed with 
a specific outfall for overflows, SSOs can occur at any point 
in a separate sewer system and during dry or wet weather. In 
its 2004 Report to Congress on the Impacts and Control of CSOs 
and SSOs (``CSO and SSO Report''), EPA defines SSOs to include 
those overflows that reach waters of the United States, as well 
as overflows out of manholes and onto city streets, sidewalks, 
and other terrestrial locations. EPA estimates that 72 percent 
of all SSOs reach the waters of the United States, but SSOs 
also include overflows that remain entirely within terrestrial 
locations, including streets, parks, and sewage backups into 
buildings and private residences.
    SSOs that reach the waters of the United States are point 
source discharges, and are prohibited under the Clean Water Act 
unless authorized by a NPDES permit under section 402 of the 
Act. In addition, all SSOs, including those that do not reach 
the waters of the United States, may be indicative of improper 
operation and maintenance of the sewer system, and thus may 
violate existing NPDES permit conditions (40 CFR 122.41 
(2008)).
    SSOs have a variety of causes including sewer line 
blockages, line breaks, or sewer defects that allow excess 
stormwater and groundwater to infiltrate and overload the 
system (also called infiltration and inflow), lapses in sewer 
operation and maintenance, inadequate sewer design and 
construction, power failures, and vandalism.
    When sewage backups are caused by problems in the publicly 
owned portion of a sanitary sewer system, they are considered 
SSOs. Generally speaking, sewage backups that are caused by 
blockages or other malfunctions of privately-owned building 
laterals do not fall within EPA's definition of a SSO.
    EPA estimates that between 23,000 and 75,000 SSOs occur per 
year in the United States, discharging a total volume of three 
to 10 billion gallons per year. According to EPA, this estimate 
does not account for discharges occurring after the headworks 
of the treatment plant or discharges into buildings caused by 
problems in the publicly owned portion of a sanitary sewer 
system, both of which would increase the annual total volume of 
SSOs.
    Individual SSOs can range in volume from one gallon to 
millions of gallons. The majority of SSO events are caused by 
sewer blockages that can occur at any time, but the majority of 
SSO volume appears to be related to events caused by wet 
weather events and excessive inflow and infiltration.

Impacts of sewer overflows

    Sewer overflows, whether from municipal combined sewer 
systems or sanitary sewer systems, can pose significant 
environmental impacts, as well as cause or contribute to human 
health impacts.
    According to its 2000 National Water Quality Inventory 
Report, EPA has determined that three pollutants are most often 
associated with impaired waters in the United States--solids, 
pathogens, and nutrients. Under the Clean Water Act, a 
waterbody is impaired if it fails to meet water quality 
standards for a particular use for the water (e.g., drinking, 
fishing, recreation).
    All three pollutants are contained in CSO and SSO 
discharges. Therefore, according to EPA, at a minimum, CSOs and 
SSOs contribute to the loadings of these pollutants in the 
receiving waters where they occur. Although EPA was not able to 
quantify a direct relationship in every state, in those states 
where EPA could identify an assessed segment of a particular 
waterbody located within one mile downstream of a CSO outfall, 
75 percent of these waterbodies were listed as impaired.
    States have identified CSOs and SSOs as the direct or a 
contributing cause of documented environmental impacts, 
including aquatic life impairments, fish kills, shellfish bed 
closures, and continuing discharges of toxic chemicals, such as 
polychlorinated biphenyls (``PCBs'') and other priority 
pollutants.
    In addition, CSOs and SSOs often contain microbial 
pathogens (e.g., bacteria, viruses, and parasites) that cause 
or contribute to human health impacts, including 
gastroenteritis, hepatitis, giardiasis, cryptosporidiosis, 
dysentery, and other gastrointestinal and respiratory diseases, 
and, in rare cases, death. The Centers for Disease Control and 
Prevention estimates that there are 7,100,000 cases of mild to 
moderate, and 560,000 cases of moderate to severe, infectious 
waterborne disease in the United States each year, though 
exactly how many of these are attributable to sewer overflows 
remains uncertain.
    Although the potential for human exposure can come in many 
forms, EPA and public drinking water agencies have expressed 
specific concern about the potential for direct contamination 
of public drinking water sources from sewer overflows. For 
example, EPA has identified 59 CSO outfalls in seven states 
located within one mile upstream of a drinking water intake. 
However, public health authorities are not routinely notified 
of sewer overflows that threaten public health.
    One recent example of the potential for drinking water 
contamination by a sewer overflow occurred in the spring of 
1993, when more than 400,000 people in Milwaukee, Wisconsin, 
were infected by a microscopic parasite, cryptosporidium 
parvum, which entered the public drinking water supply for the 
city. This outbreak resulted in over 100 deaths. Although the 
exact source of the parasite was not discovered, studies 
suggest that untreated wastewater leaks in the Milwaukee area 
may have discharged the parasite to Lake Michigan, which serves 
as the primary drinking water source for the metropolitan 
region. Although impacts as large as the Milwaukee 
cryptosporidium outbreak are rare, similar parasitic outbreaks 
have contaminated drinking water sources in other U.S. cities, 
such as Brushy Creek, Texas (1998), Island Park, Idaho (1995), 
Las Vegas, Nevada (1993), Cabool, Missouri (1990), and Braun 
Station, Texas (1985).
    Finally, EPA estimates that CSOs and SSOs cause between 
3,448 and 5,576 individual cases of illness annually from 
direct exposure to pollutants at the nation's recognized 
recreational beaches. Yet, it its CSO and SSO Report, EPA 
stated that this range under-represents the likely number of 
annual illnesses (estimated by EPA to be between 1,800,000 and 
3,500,000 individuals annually) attributable to CSO and SSO 
contamination of recreational beaches, and that a significant 
number of additional illnesses not captured in this range occur 
for exposed swimmers at inland and other coastal beaches.
    Correcting these problems is expensive. In 2000, EPA 
estimated the cost to communities of addressing CSOs to be 
$50.6 billion, and the cost of addressing SSOs to be $88.5 
billion. The vast majority of these costs will be borne by 
local communities and local ratepayers. Federal assistance has 
been small relative to the overall needs to address CSOs and 
SSOs. Through June 2006, States have made approximately $5.3 
billion in loans for CSOs from Clean Water SRFs and have made 
approximately $6 billion in loans to address the infiltration 
and inflow into sewer pipes that can cause SSOs.
    To provide additional Federal assistance, in 2000, Congress 
amended the Clean Water Act to add section 221 (P.L. 106-554). 
Section 221 authorized appropriations of $750 million for each 
of fiscal years 2002 and 2003 for EPA to make grants to States 
and municipalities for controlling CSOs and SSOs. This 
authorization was conditioned upon the receipt of at least 
$1.35 billion in appropriations for the Clean Water State 
Revolving Loan Funds. No funds were appropriated for sewer 
overflow control grants in either fiscal year 2002 or 2003.
    Reauthorization of appropriations for section 221 provides 
an authority to help municipalities and States control combined 
sewer overflows and sanitary sewer overflows.

                SEWAGE OVERFLOW COMMUNITY RIGHT-TO-KNOW

    The most reliable way to prevent human illness from 
waterborne diseases and pathogens is to eliminate the potential 
for human exposure to the discharge of pollutants from CSOs and 
SSOs. This can occur either through the elimination of the 
discharge, or, in the event that a release does occur, to 
minimize the potential human contact to pollutants. Currently, 
Federal law does not provide a uniform, national standard for 
public notification of combined and sanitary sewer overflows. 
Public notification of sewer overflows is governed by a variety 
of Federal regulations, state laws, and local initiatives aimed 
at limiting human exposure to discharges.
    Potential human exposure to the pollutants found in sewer 
overflows can occur through several pathways. According to EPA, 
the most common pathways include direct contact with waters 
receiving CSO or SSO discharges, drinking water contaminated by 
sewer discharges, and consuming or handling contaminated fish 
or shellfish. However, humans are also at risk of direct 
exposure to sewer overflows, including sewer backups into 
residential buildings, city streets, and sidewalks.
    As noted earlier, the cost of eliminating CSOs and SSOs 
throughout the nation is staggering. However, in the event that 
a release does occur, the most effective way to prevent illness 
is to provide timely and adequate public notice to minimize 
human exposure to pollutants.
    Although public notification of sewer overflows is not 
uniformly required, some Federal statutes do provide specific 
requirements for the timely public notification of potential 
human health risks from waterborne contaminants.
    For example, section 1414 of the Safe Drinking Water Act 
requires public water systems to notify the persons served by 
the system of any failure to comply with applicable Federal or 
state drinking water standards, the existence of any drinking 
water variance to safe drinking water standards, and the 
presence of any ``unregulated contaminants'' that pose a public 
health threat. The Act also requires public water systems to 
implement notification procedures to ensure that any violation 
of a drinking water standard with potential serious adverse 
effects on human health be made public as soon as practicable, 
but not later than 24 hours after the violation. Finally, the 
Act requires public water systems to provide written notice and 
annual reports to Federal and State agencies, as well as to the 
public.
    Similarly, section 406 of the Clean Water Act authorizes 
funding for state and local governments to implement coastal 
recreational water quality monitoring and notification 
programs. This authority, enacted as part of the Beaches 
Environmental Assessment and Coastal Health (BEACH) Act of 
2000, requires as a Federal grant condition that state and 
local governments identify measures for the prompt 
communication of contamination of coastal water quality, as 
well as measures for the posting of appropriate public notice 
(e.g., beach signs) that the coastal waters fail to meet water 
quality standards.
    Typically, the presence of waterborne contaminants in 
drinking water and surface waters utilized for recreation is 
detected through direct water quality sampling or national 
reports of waterborne illness outbreaks, coordinated through 
the Centers for Disease Control and Prevention's National 
Center for Infectious Diseases. The likelihood for detection of 
potential waterborne contaminants in drinking water and 
recreational waters would dramatically increase if local 
governmental officials and the public were provided with direct 
notification in the event of a sewer overflow, rather than 
waiting for the results of local water sampling or 
epidemiological studies.
    Over the past decade, EPA has taken several administrative 
steps to encourage local governmental agencies, including 
sewerage agencies, to report sewer overflows to Federal and 
State agencies and the public.
    EPA's CSO Control Policy requires owners and operators of 
combined sewer systems to implement minimum technology-based 
controls (the ``nine minimum controls'') that can reduce the 
prevalence and impacts of CSOs without significant engineering 
studies or major construction. These controls include a 
requirement for the public disclosure of CSOs. The policy does 
not require any particular methodology for notification, but 
identifies potential methods, including posting appropriate 
notices in affected use areas or public places, newspaper, 
radio, or television news programs, and direct mail contact for 
affected residents. The requirements of the control policy are 
limited to CSOs.
    For SSOs, there is no consistent Federal requirement for 
public notification of sewer overflows. Under existing EPA 
regulations (40 CFR 122.41(l)(6)), NPDES permits should 
establish a process for requiring a permittee to report any 
noncompliance with the permit that may endanger health or the 
environment. However, EPA regulations do not specifically 
require notification of the public in the event of a sanitary 
sewer overflow.
    To address this lack of a consistent Federal requirement 
for public notification, in January 2001, EPA issued a draft 
SSO rule that, among other issues, would have implemented a 
formal program for reporting, public notification, and 
recordkeeping for sanitary sewer systems and SSOs.
    This draft rule would have required owners and operators of 
sanitary sewer systems to develop an overflow emergency plan 
describing how the owner or operator would immediately notify 
the public, public health agencies, and other similar entities 
(e.g., drinking water suppliers and beach monitoring 
authorities), of overflows that may imminently and 
substantially endanger human health. In addition, the draft SSO 
rule would have required owners or operators of publicly owned 
treatment works to provide the appropriate Federal or state 
agencies with information on the magnitude, duration, and 
suspected cause of the overflow, as well as actions necessary 
to avoid future overflows.
    EPA's draft SSO rule was never finalized, and was later 
withdrawn. No additional regulatory proposals for public 
notification of SSOs have been issued.

                         GREAT LAKES LEGACY ACT

    The Great Lakes basin includes all of the state of 
Michigan, parts of Illinois, Indiana, Minnesota, New York, 
Ohio, Pennsylvania, Wisconsin, and the Canadian provinces of 
Ontario and Quebec. Approximately 40 million people live within 
the Great Lakes basin. Water in the Lakes is used for a 
multitude of activities including fishing, swimming, boating, 
agriculture, industry, and shipping. In addition, the Lakes 
contain around 84 percent of North America's and 21 percent of 
the world's surface fresh water supplies.
    Industrialization and development have had a significant 
impact on the Great Lakes ecosystem. The region's industrial 
development has included mining, steel production, and machine 
tool and automobile manufacturing. Agriculture is also a 
significant component of the regional economy. The Great Lakes 
have historically provided convenient waterways for the 
movement of goods. They also provide process and cooling water 
for industrial users, and are used to generate hydroelectric 
power. While industrialization, agriculture, power generation, 
and other activities have produced significant economic 
development in the region, water quality has also been 
adversely impacted.
    In its 2002 National Water Quality Inventory, the 
Environmental Protection Agency (``EPA'') reports that 91 
percent of assessed Great Lakes shoreline miles were impaired--
meaning that the shoreline did not meet all of its designated 
uses, including fishing, swimming, and suitability for aquatic 
wildlife habitat. The leading causes of impairment include the 
presence of pathogens, metals, and toxic organic compounds in 
the shoreline waters of the Great Lakes. EPA notes that the 
dominant cause of reported shoreline impairment is legacy, or 
historical, pollution--chiefly contaminated sediment. In the 
same report, EPA reports that 99 percent of the assessed Great 
Lakes open waters were rated as impaired. The predominant 
causes of this impairment include the presence of priority 
organics, metals (primarily mercury), and pesticides in the 
open waters of the Great Lakes. The primary sources of open 
water impairments are atmospheric deposition, industrial 
sources, agriculture, and legacy (historical) pollutants.
    The impaired nature of the Great Lakes is also reflected in 
the biennial assessment of EPA and Environment Canada, entitled 
the ``State of the Great Lakes'' report, which is carried out 
pursuant to the 1987 Great Lakes Water Quality Agreement. In 
2007, this report identified the status of the Great Lakes 
ecosystem as ``mixed'', with the particular concern expressed 
on the localized toxic contamination that continues to exist in 
high levels in the Great Lakes areas of concern.
    Under the Boundary Waters Treaty of 1909, the United States 
and Canada created the International Joint Commission (``IJC'') 
to monitor, periodically inspect, and make recommendations on 
actions to be taken by the United States and Canada to protect 
the Great Lakes. The IJC has six commissioners, three from each 
nation. In 1972, the United States and Canada signed the Great 
Lakes Water Quality Agreement to address mutual interests and 
improve water quality. In 1987, the two nations revised the 
agreement and committed to ecosystem cleanup plans for ``areas 
of concern''. The IJC monitors progress toward these 
commitments and issues biennial reports.
    To support the commitments made in the Great Lakes Water 
Quality Agreement, Congress added section 118 to the Clean 
Water Act in 1987. Section 118 formally established the Great 
Lakes National Program Office within EPA. One of the functions 
of the Office is to ensure that Remedial Action Plans are 
developed and implemented for the areas of concern identified 
by the United States and Canada.
    At present, there are 43 areas of concern within the Great 
Lakes Basin, 26 areas wholly within the United States, 12 areas 
located wholly within Canada, and 5 areas that are shared by 
both countries. The areas of concern were defined under the 
Great Lakes Water Quality Agreement as ``ecologically degraded 
geographic areas requiring remediation''. An area is considered 
ecologically degraded if at least one of 14 beneficial use 
impairments is present as a result of contamination--
restrictions on fish and wildlife consumption; tainting of fish 
and wildlife flavor; degradation of fish and wildlife 
populations; fish tumors or other deformities; bird or animal 
deformities or reproduction problems; degradation of benthos; 
restrictions on dredging activities; eutrophication or 
undesirable algae; restrictions on drinking water consumption, 
or taste and odor problems; beach closings; degradation of 
aesthetics; added costs to agriculture or industry; degradation 
of phytoplankton and zooplankton populations; or loss of fish 
and wildlife habitat.

                       Summary of the Legislation


Section 1. Short title; table of contents

    This section designates the title of the bill as the 
``Water Quality Investment Act of 2009''.

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--Water Quality Financing


            Subtitle A--Technical and Management Assistance


Section 1101. Technical assistance for rural and small treatment works

    This section amends section 104 of the Clean Water Act to 
authorize appropriations of $100 million for each of fiscal 
years 2010 through 2014 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, 
including the authorization of $20 million in appropriations 
annually for a new program to provide financial and technical 
assistance to rural and small communities.
    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) authorizes appropriations of $100 million 
for each of fiscal years 2010 through 2014 for carrying out 
existing sections 104(b)(3) and 104(g), 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 section 104(b)(8).
    Subsection (c) increases the authorization of 
appropriations for EPA's national small flows clearinghouse, 
which collects and disseminates information on small flows of 
sewage and innovative or alternative wastewater treatment 
processes and techniques.

Section 1102. State management assistance

    This section amends section 106 of the Act to authorize 
appropriations of $300 million for each of fiscal years 2010 
through 2014 for an existing EPA program that provides 
financial assistance to state water quality management 
programs.

Section 1103. Watershed pilot projects

    This section authorizes appropriations of $20 million for 
each of fiscal years 2010 through 2014 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.
    Subsection 1103(a) 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.
    Subsection 1103(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 October 1, 2011.

              Subtitle B--Construction of Treatment Works


Section 1201. 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 1201 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 1202. 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.

       Subtitle C--State Water Pollution Control Revolving Funds


Section 1301. 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 1302. Capitalization grant agreements

    Subsection 1302(a) requires loan recipients to comply with 
Federal accounting standards governing the reporting of 
infrastructure assets.
    Subsection 1302(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.
    Paragraph 1302(b)(1) amends existing section 602(b)(6) of 
the Act to reinstate two requirements that were applied to 
projects for the construction of publicly owned treatment works 
prior to October 1, 1994, related to limitations on the 
replacement of existing sewage collection systems or the 
construction of new sewage collection systems, and the 
application of the National Environmental Policy Act (``NEPA'') 
of 1969. The Committee has included language to reinstate the 
application of NEPA to publicly owned treatment works 
constructed in whole or in part with assistance made available 
by a State water pollution control revolving loan fund. The 
Committee understands that this requirement has been met by 
States in the Clean Water SRF program through the use of State 
Environmental Review Processes (``SERP'') that conform 
generally to NEPA. It is the intent of the Committee that 
States continue the use of such SERPs to meet the requirements 
of section 511(c)(1) of this Act.
    New section 602(b)(11) of the Act requires States to 
establish and maintain their 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) of the Act requires States to use 
any fees charged to loan applicants that are considered program 
income solely for the purpose of financing administrative costs 
or financing projects or activities eligible for assistance 
from the fund.
    New section 602(b)(13) of the Act directs States, beginning 
in fiscal year 2011, to require loan applicants to evaluate the 
cost and effectiveness of the 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 capital, operation, and 
maintenance costs and maintain sustainable systems. Several 
communities have begun to utilize ``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, 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 potential reductions in overall 
energy consumption that can be achieved at new and existing 
wastewater treatment operations through the use of existing 
energy efficiency technologies and renewable energy sources.
    Finally, the Committee 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) of the Act seeks to encourage loan 
recipients to explore additional options for processes, 
materials, techniques, and technologies for improving water 
quality, and, where possible, to maximize the potential for 
efficient water use, reuse, and conservation, and energy 
conservation.
    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) of the Act directs States to use at 
least 10 percent of their 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. This 
percentage is consistent with EPA's assessment of the need for 
communities with populations of 10,000 or fewer, as identified 
in the Clean Watersheds Needs Survey 2004 Report to Congress.
    New section 602(b)(15) of the Act requires States 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)(16) of the Act 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)(16) 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 permanently 
apply to 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 is 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 1303. 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: the 
implementation of lake protection programs and projects under 
section 314 of the Act; the repair and replacement of 
decentralized wastewater treatment systems that treat domestic 
sewage; measures to manage, reduce, treat, or reuse municipal 
stormwater, agricultural stormwater, and return flows from 
irrigated agriculture; projects for water conservation, 
efficiency, or reuse; and the development and implementation of 
watershed pilot projects under section 122 of the Act (as 
amended by this legislation).
    In the 110th Congress, the Committee reported H.R. 720, the 
``Water Quality Financing Act of 2007'', to reauthorize 
appropriations for the Clean Water SRFs. H.R. 720, as passed 
the House, included language that specifically enumerated 
``measures to increase the security of publicly owned treatment 
works'' as an eligible use for the Clean Water SRFs. The 
Committee is aware that the implementation of certain security 
measures at publicly owned treatment works is an eligible use 
of the Clean Water SRF under current law, and, accordingly the 
measures do not need to be specifically enumerated in the 
potential amendments to section 603(c) contained in this Act. 
The Committee intends that the implementation of certain 
security measures continue to be an eligible use of the Clean 
Water SRFs, to the extent that such measures are eligible under 
existing law.
    (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 utilize a portion of their annual 
capitalization grant to provide assistance, in the form of a 
grant, to certain communities for technical, planning, and 
other assistance in the management of publicly owned treatment 
works.
    New paragraph 603(d)(8) authorizes States to provide grants 
to owners and operators of publicly owned treatment works that 
serve a population of 10,000 or fewer for obtaining technical, 
planning, and equipment replacement assistance. This subsection 
should assist communities of fewer than 10,000 individuals 
plan, manage, and maintain their wastewater infrastructure.
    New paragraph 603(d)(9) authorizes a state to provide 
grants to owners and operators of publicly owned treatment 
works for conducting an assessment of the energy and water 
consumption of the treatment works, and for evaluating 
potential opportunities for energy and water conservation 
through facility operation and maintenance, equipment 
replacement, and projects or activities that promote the 
efficient use of energy and water by the treatment works. The 
Committee has received testimony that a potential barrier to 
the implementation of energy- and water-efficient technologies 
is a lack of information on the potential benefits that 
implementation of these technologies can provide to publicly 
owned treatment works. For example, witnesses testified on the 
potential benefits of implementation of water- and energy-
efficient technologies at publicly owned treatment works, 
including potential cost savings for both capital expenditures 
and short- and long-term operation and maintenance costs of the 
treatment works, as well as water quality improvements and 
measures to reduce carbon emissions by the use of renewable 
energy sources.
    (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 the 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 a process, material, 
technique, or technology to address water-efficient goals, 
address energy-efficiency goals, mitigate stormwater runoff, or 
encourage environmentally sensitive project planning, design, 
and construction.
    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 1303(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 1302(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 1303(f) also authorizes a state revolving fund to 
provide increased financial flexibility to implement processes, 
materials, techniques, and technologies, to address water-
efficiency goals, to address energy-efficiency goals, to 
mitigate stormwater runoff, or to encourage environmentally 
sensitive project planning, design, and construction. The 
Committee intends that projects and project categories for 
water-efficient, energy-efficient, green infrastructure, and 
environmentally innovative projects that are identified in 
Attachment 7 of EPA's March 2, 2009 guidance for the ``Award of 
Capitalization Grants with Funds Appropriated by P.L. 111-5, 
the `American Recovery and Reinvestment Act of 2009' '' would 
be eligible for the additional subsidization authorized by new 
section 603(i)(1)(B) of the Act.
    Moreover, subsection (f) requires States to establish 
affordability criteria on or before September 30, 2010, 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 the 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 the 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 the State may provide.

Section 1304. 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 2012 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 States 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 of such grant.

Section 1305. Intended use plan

    (a) Integrated Priority List.--
    Section 1305(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 2011, 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 the State's priority list, this 
subsection directs States 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 1305(b) amends section 606(c) of the Act to require 
States 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 1305(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 1306. Annual reports

    This section amends section 606(d) of the Act to require 
that States include, as part of their existing reporting 
requirements to EPA, a list of the eligible purposes for which 
state revolving funds are provided.

Section 1307. Technical assistance; requirements for use of American 
        materials

    This section amends the Act to direct the Administrator to 
assist States in establishing simplified procedures for 
obtaining financial assistance from the state revolving fund, 
and to reinstate the applicability of the Buy American Act to 
the construction of treatment works funded by the Clean Water 
Act.
    New section 607 of the Act 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.
    New section 608 of the Act requires that treatment works 
constructed with funds made available by a state water 
pollution control revolving fund utilize steel, iron, and 
manufactured goods produced in the United States. New 
subsection 608(b) provides three exemptions from this 
requirement in any case in which the Administrator, in 
consultation with the Governor of the State, finds that: (1) 
the use of United States' steel, iron, and manufactured goods 
would be inconsistent with the public interest; (2) steel, 
iron, and manufactured goods are not produced in United States 
in sufficient and reasonably available quantities and of a 
satisfactory quality; or (3) inclusion of steel, iron, and 
manufactured goods produced in the United States will increase 
the overall cost of the project by more than 25 percent. New 
subsection 608(c) provides specific requirements for public 
notification for, and written justification of, a waiver of the 
provisions in subsection 608(a).

Section 1308. Authorization of appropriations

    This section authorizes appropriations of $13.8 billion 
over five years for the capitalization of state revolving 
funds, as follows: $2.4 billion in fiscal year 2010, $2.7 
billion in fiscal year 2011, $2.8 billion in fiscal year 2012, 
$2.9 billion in fiscal year 2013, and $3 billion in fiscal year 
2014.

                     Subtitle D--General Provisions


Section 1401. 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 1402. 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.

                       Subtitle E--Tonnage Duties


Section 1501. 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 India 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 1501(a) 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 2010 through 2019.
    Section 1501(b) provides that any tonnage duties owed under 
Chapter 603 of title 46, United States Code, are a liability 
against the vessel in rem, and can be proceeded against in any 
United States district court in which the vessel may be found.
    The Committee is concerned that increases and decreases in 
tonnage fees have not always been implemented by the Bureau of 
Customs and Border Protection (CBP) of the U.S. Department of 
Homeland Security in a timely manner. The current national 
deficit makes it imperative that the increase in tonnage duties 
under this section be collected as soon as possible. The 
Committee will vigorously oversee the implementation of this 
increase in tonnage duties to ensure that CBP implements and 
collects the increase in tonnage duties provided in this 
section in accordance with the law.

              Title II--Alternative Water Source Projects

    Section 2001 amends section 220 of the Clean Water Act to 
authorize appropriations of $50 million for each of fiscal 
years 2010 through 2014, for a total of $250 million, for EPA 
grants for alternative water source projects.

                Title III--Sewer Overflow Control Grants


Section 3001. Sewer overflow control grants

    Subsection (a) amends section 221(e) of the Act to require 
that a project that receives assistance under this section is 
carried out in accordance with the requirements for projects 
receiving assistance from State Revolving Loan Funds under 
title VI of the Clean Water Act, except to the extent that the 
Governor of the State in which the project is located 
determines that a requirement of title VI is inconsistent with 
the purposes of this section. This section allows States to 
implement grants under section 221 in conjunction with a 
state's Clean Water SRF program.
    Subsection (b) amends section 221(f) of the Act to 
authorize appropriations of $1.8 billion over five years, 
providing $250 million in fiscal year 2010, $300 million in 
fiscal year 2011, $350 million in fiscal year 2012, $400 
million in fiscal year 2013, and $500 million in fiscal year 
2014.
    Subsection (c) amends section 221(g) of the Act to update 
the provision for allocation of funds to reflect the new dates 
of authorization and reauthorized amounts. Specifically, 
consistent with section 221 as originally enacted, funding in 
the first year of authorization is to be used for direct grants 
by the Administrator to municipalities. For fiscal year 2011 
and thereafter, the Administrator will allocate funds to 
States, in accordance with a needs-based formula to be 
established by the Administrator, and such funds are to be used 
by states to make grants to municipalities.
    Subsection (d) amends section 221(i) of the Act to change 
the date that the Administrator is required to transmit to 
Congress a report containing recommended funding levels for 
grants under this section from December 31, 2003, to December 
31, 2012.

   Title IV--Monitoring, Reporting, and Public Notification of Sewer 
                               Overflows


Section 4001. Monitoring, reporting, and public notification of sewer 
        overflows

    This section amends section 402 of the Act by adding a new 
subsection (s) to provide a uniform, national standard for 
monitoring, reporting, and public notification of combined 
sewer overflows and sanitary sewer overflows. The monitoring, 
notification, and reporting requirements of this section are 
important steps to protect human health and the environment by 
ensuring that public health authorities (and other affected 
entities) and the public are aware of sewer overflows, may take 
steps to avoid contact with overflows, and that sewer overflows 
are addressed in an expedited manner. In addition, the 
availability of comprehensive information on the number, 
frequency, and location of sewer overflows may provide 
additional support for increased investment in the nation's 
water related infrastructure to reduce sewer overflows.
    New subsection (s)(1) requires that, after the last day of 
the 180-day period beginning on the date on which regulations 
are issued under new subsection (s)(4), the Administrator (or 
the State, as the case may be) shall require that each permit 
issued under this section for a publicly owned treatment works 
shall require, at a minimum, that the owner or operator of the 
treatment works implement the monitoring, notification, and 
reporting requirements described in this subsection.
    The Committee intends the term ``publicly owned treatment 
works'' to include those devices and systems included within 
the term ``treatment works'', as defined by section 212 of the 
Act, that are under the ownership or operational control of the 
Federal Government, or a state or a municipality as such terms 
are defined in section 502 of the Act. New subsection (s)(1) 
does not include treatment works that are not owned or under 
the operational control of the Federal Government, a state, or 
a municipality. New subsection (s)(1) also does not require a 
publicly owned treatment works to assume monitoring, 
notification, and reporting responsibility for satellite 
collection systems (portions of a sanitary sewer system) that 
may be connected to, but are not owned or operated by the 
publicly owned treatment works. The Committee notes that EPA's 
draft SSO rule (January 2001) would have included satellite 
collection systems within the scope of its authority. Satellite 
collection systems account for a majority of sanitary sewer 
overflows that occur throughout the nation. Although the 
provisions of this title do not require a publicly owned 
treatment works to assume monitoring, notification, and 
reporting responsibility for a satellite collection system 
which is not owned or operated by the treatment works, the 
Committee believes that implementation of a monitoring, 
notification, and reporting program for satellite collection 
systems would further the goals of the Clean Water Act, as 
amended by this title.
    New subsection (s)(1)(A) requires the owner or operator of 
a publicly owned treatment works to institute and utilize a 
feasible methodology, technology, or management program to 
alert the owner or operator of the publicly owned treatment 
works to the occurrence of a sewer overflow in a timely manner.
    The Act, as amended by this title, does not define the 
terms ``feasible'' and ``timely'', but directs the 
Administrator to conduct a formal rulemaking to define such 
terms under new subsection (s)(4). The Committee expects that 
the implementation monitoring methodologies, technologies, or 
management programs that meet the ``feasible'' and ``timely'' 
requirements will be reasonably sufficient to provide the owner 
or operator with actual or constructive knowledge of the 
presence of a sewer overflow.
    The Committee does not intend new subsection (s)(1)(A) to 
require the implementation of a technology-based system at 
every treatment works to monitor for potential sewer overflows, 
but allows individual publicly owned treatment works to utilize 
appropriate methodologies, technologies, or management programs 
that will alert the owner or operator of sewer overflows, 
consistent with the Agency's regulations under new subsection 
(s)(4). The Committee does intend that whatever approved 
methodology, technology, or management program is utilized for 
monitoring, that such methodology, technology, or management 
program is fully-implemented and adequately maintained, funded, 
or staffed to ensure that the owner or operator is alerted to 
the occurrence of a sewer overflow.
    New subsection (s)(1)(B) and (C) require the owner or 
operator of a publicly owned treatment works to provide notice 
in the event of a sewer overflow. New subsection (s)(1)(B) 
requires owners and operators to notify the public of a sewer 
overflow that has the ``potential to affect human health'' as 
soon as practicable, but not later than 24 hours after the time 
the owner or operator knows of the overflow. New subsection 
(s)(1)(C) requires owners or operators to notify public health 
authorities and other affected entities, such as public water 
systems, of a sewer overflow that may imminently and 
substantially endanger human health immediately after the owner 
or operator knows of the overflow.
    The Act, as amended by this title, does not define the 
terms ``potential to affect human health'' or ``imminently and 
substantially endanger human health'', but directs the 
Administrator to conduct a formal rulemaking to define such 
terms under new subsection (s)(4). In addition, new subsection 
(s)(4) directs the Administrator to establish a set of criteria 
for communication measures that are sufficient to give notice 
under new subsections (s)(1)(B) and (C).
    The Committee intends that the regulations promulgated by 
the Environmental Protection Agency with respect to 
notification not preclude States, municipalities, or individual 
publicly owned treatment works from adopting more stringent 
notification requirements than called for by this title. The 
Committee intends to provide States, municipalities, and 
individual publicly owned treatment works with the maximum 
amount of flexibility for the adoption of individually tailored 
notification programs, provided that such programs meet the 
minimum standards called for by the Act, as amended by this 
title, including any regulations promulgated pursuant to this 
title.
    Subsection (s)(2)(A) provides a limited exemption from the 
notice requirements of subsections (s)(1)(B) and (s)(1)(C) for 
a sewer overflow that is limited to a wastewater backup into a 
single-family residence (as this term is defined in new 
subsection (s)(7)(C)). The Committee has provided this limited 
exemption because, in practice, it is likely that residents of 
the single-family residence will already know of the backup 
into the residence, and in many cases, will likely have 
provided notice to the owner or operator of the publicly owned 
treatment works. The Committee felt that a limited exemption 
from the notice was warranted to avoid the likelihood that the 
residents of the single-family residence will notify the 
publicly owned treatment works, only to be later notified by 
the same treatment works as to the presence of the sewer 
overflow. This exemption, however, does not apply to a sanitary 
sewer overflow or municipal combined sewer overflow that is 
released outside of a single-family residence, or to such 
overflows in a residence that does not meet the definition of a 
single-family residence found in new subsection (s)(7)(C). For 
example, if a sewer overflow occurs in a multi-family 
structure, such as an apartment building, condominium, or 
dormitory, and the overflow reaches the common areas of such 
structure (e.g., a common hallway, laundry facility, foyer, or 
entryway), the owner or operator of the treatment works is 
required to provide notice to appropriate persons under 
subsections (s)(1)(B) and (s)(1)(C).
    New subsections (s)(1)(D) and (s)(1)(E) require the owner 
or operator of a publicly owned treatment works to report sewer 
overflows to the Administrator or the State. New subsection 
(s)(1)(D) requires an owner or operator to report each sewer 
overflow on its discharge monitoring report, including 
information on the magnitude, duration, and suspected cause of 
the overflow, the steps taken or planned to reduce, eliminate, 
or prevent the recurrence of the overflow, and the steps taken 
or planned to mitigate the impact of the overflow. New 
subsection (s)(1)(E) requires the owner or operator to report 
the total number of sewer overflows that occur in a calendar 
year, including specific details on the volume of wastewater 
released per incident, the duration of each sewer overflow, the 
location of the overflow and any potentially affected receiving 
waters, the responses taken to clean up the overflow, and any 
actions taken to mitigate the impacts of the overflow and to 
avoid further future overflows at the site.
    New subsection (s)(2)(B) provides a limited exemption from 
the reporting requirements of subsections (s)(1)(D) and 
(s)(1)(E) for the release of wastewater that: (1) occurs in the 
course of maintenance of the treatment works; (2) is managed 
consistently with the treatment works' best management 
practices; and (3) is intended to prevent overflows. The 
Committee has provided this limited exemption to address 
routine maintenance of sewer systems, such as activities to 
clear our sewer lines. The Committee intends this exemption to 
be read narrowly, that it be limited to releases that are both 
de minimus in terms of both duration and volume, and meet all 
of the requirements listed in the exemption. The reporting 
requirement exemption in subsection (s)(2)(B) does not include 
releases in connection with a ``bypass'' or ``upset'', as those 
terms are defined in the Code of Federal Regulations (40 CFR 
122.41 (m) and (n) (2008)).
    New subsection (s)(3) requires individual States to provide 
an annual summary report to the Administrator on sewer 
overflows that occurred within the State.
    New subsection (s)(4) directs the Administrator, within one 
year of the date of enactment of this title, to finalize and 
issue regulations to implement new subsection (s), including 
regulations to provide additional clarity on the terms 
``feasible'', ``timely'', ``potential to affect human health'', 
and ``imminently and substantially endanger human health''.
    In defining the term ``feasible'', the Committee expects 
the Administrator to consider: (1) the availability of a 
monitoring technology, methodology, or management program; (2) 
the ability of a technology, methodology, or management program 
to reasonably detect the occurrence of a sewer overflow; (3) 
the cost of implementing the technology, methodology, or 
management program; (4) the designated use of potential 
receiving waters; (5) the proximity of an overflow to a source 
of drinking water or a recreation water; (6) the potential 
public health implications of an overflow to the public, with 
particular emphasis on susceptible populations; (7) the size of 
the publicly owned treatment works (in terms of population 
served and the treatment capacity of the treatment works); (8) 
the nature or quality of pollutants contained in the raw waste 
load of the treatment works wastewater; (9) the frequency, 
volume, and duration of past sewer overflows by a particular 
publicly owned treatment works; and (10) other factors that the 
Administrator considers appropriate.
    In defining the term ``timely'', the Committee expects the 
Administrator to ensure that the owner or operator of the 
publicly owned treatment work has knowledge of the sewer 
overflow as quickly as practicable, depending upon the 
monitoring technology, methodology, or management program 
implemented by the owner or operator, and consistent with the 
public health goals of this title and goals of the Clean Water 
Act ``to restore and maintain the chemical, and physical, and 
biological integrity of the Nation's waters.''
    New subsection (s)(4)(B) directs the Administrator to 
include site specific conditions within its regulatory 
definition for the terms ``feasible'' and ``timely''.
    New subsection (s)(5) authorizes the Administrator to 
review and approve a legally enforceable state notification 
program that the Administrator determines is substantially 
equivalent to or exceeds the requirements of new subsections 
(s)(1)(B) and (s)(1)(C), and to withdraw authorization of such 
program if a state in not administering or enforcing the 
program.
    New subsection (s)(6) provides that notification 
requirements contained in new subsections (s)(1)(B) and 
(s)(1)(C) shall apply to owners and operators of publicly owned 
treatment works beginning on the last day of the 30-day period 
beginning on the date of issuance of regulations under new 
subsection (s)(4). While the issuance of regulations under new 
subsection (s)(4) should serve as notice of the revised 
notification requirements applicable to owners and operators of 
publicly owned treatment works, the Committee encourages EPA 
(or the State, as the case may be) to provide such owners and 
operators with reasonable notice of any new notification 
requirements established by such regulations.
    New subsection (s)(7) defines the terms ``sanitary sewer 
overflow'', ``sewer overflow'', and ``single family residence'' 
as such terms are utilized in new subsection (s). The 
definition for ``sanitary sewer overflows'' is modeled after 
the definition for such term in EPA's proposed rule for 
``National Pollutant Discharge Elimination System (NPDES) 
Permit Requirements for Municipal Sanitary Sewer Collection 
Systems, Municipal Satellite Collection Systems, and Sanitary 
Sewer Overflows,'' signed by the Administrator on January 4, 
2001.
    The term ``sewer overflow'' is defined to include both 
sanitary sewer overflows and municipal combined sewer 
overflows.
    The term ``single-family residence'' is defined as an 
individual dwelling unit, including an apartment, condominium, 
house, or dormitory, but specifically excludes common areas 
from multi-dwelling structures. The definition for ``single-
family residence'' is utilized to define the scope of the 
limited exemption for notice of sewer overflows found in 
subsections (s)(1)(B) and (s)(1)(C).
            Additional matters
    The monitoring, notification, and reporting requirements of 
title IV of H.R. 1262 are not intended to preclude or deny any 
right of a State, municipality, or individual publicly owned 
treatment works from implementing monitoring, notification, or 
reporting requirements that are more stringent or comprehensive 
than those contained in such title or the regulations 
promulgated by the Environmental Protection Agency to implement 
such title. Accordingly, States, municipalities, and individual 
publicly owned treatment works may adopt or enforce any 
regulation, requirement, or permit condition with respect to 
the monitoring, notification, and reporting that is more 
stringent than a regulation, requirement, or permit condition 
issued under the Act, as amended by title IV of H.R. 1262.
    In addition, the additional monitoring, notification, and 
reporting requirements made by title IV of H.R. 1262 do not 
explicitly or implicitly authorize sanitary sewer overflows or 
municipal combined sewer overflows outside of the existing 
statutory requirements of the Clean Water Act.
    Finally, the Committee intends that the amendments to the 
Clean Water Act made by title IV of H.R. 1262 will continue to 
allow for the utilization of the Combined Sewer Overflow 
Control Policy (under Sec. 402(q) of the Clean Water Act) to 
the extent that the monitoring, notification, and reporting 
requirements contained in the nine minimum controls and long 
term control plan of an individual publicly owned treatment 
works are not inconsistent with the requirements of title IV of 
H.R. 1262. To the extent that an individual publicly owned 
treatment works' nine minimum controls or long-term control 
plan either does not include monitoring, notification, or 
reporting requirements, or such requirements are inconsistent 
with the requirements of title IV of H.R. 1262, the monitoring, 
notification, or reporting requirements contained in title IV 
of H.R. 1262, and the implementing regulations promulgated by 
the Environmental Protection Agency shall apply.

              Title V--Great Lakes Legacy Reauthorization


Section 5001. Remediation of sediment contamination in areas of concern

    This section amends section 118(c)(12)(H) of the Act to 
increase the overall authorization of appropriations for 
section 118(c)(12) from $50 million to $150 million for each of 
fiscal years 2010 through 2014.

Section 5002. Public information program

    This section amends section 118(c)(13) of the Act to 
reauthorize appropriations for EPA's public information program 
for each of fiscal years 2010 through 2014.

Section 5003. Contaminated sediment remediation approaches, 
        technologies, and techniques

    This section amends section 106(b)(1) of the Great Lakes 
Legacy Act of 2002 (33 U.S.C. 1271a) to reauthorize 
appropriations, at increased levels, for a program within the 
Environmental Protection Agency to demonstrate potential 
contaminated sediment remediation approaches, technologies, and 
techniques.
    The Committee strongly supports the establishment of a 
program within EPA to develop innovative approaches, 
technologies, and techniques for the remediation of 
contaminated sediment within the Great Lakes areas of concern. 
The Committee believes that this program could be instrumental 
in developing new technologies for the remediation of 
contaminated sediment which could substantially reduce the 
overall cost of remediation activities for contaminate sediment 
projects, both within the Great Lakes areas of concern as well 
as nationwide.
    Consistent with House Report 107-587 (Part 1), the 
Committee expects that the Administrator will collaborate with 
non-Federal entities, including colleges, universities, and 
private entities, in carrying out the Administrator's 
responsibilities under this section. In selecting non-Federal 
entities to participate in demonstration projects under this 
section, the Administrator is directed to give preference to 
non-Federal entities located within the Great Lakes watershed.

            Legislative History and Committee Consideration


                    TITLE I--WATER QUALITY FINANCING

    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''. On February 4, 
2009, the Subcommittee held a hearing entitled ``Sustainable 
Wastewater 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, Representative John J. Duncan 
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, Representative John J. Duncan 
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, Representative John J. Duncan 
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.
    In the 110th Congress, Chairman James L. Oberstar 
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, and recommended H.R. 720, 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, reconsidered the 
bill for amendment, and ordered the bill, as amended by the 
Committee, reported favorably to the House by voice vote. On 
March 5, 2007, the Committee reported the bill to the House. H. 
Rept. 110-30. On March 9, 2007, the House of Representatives 
passed H.R. 720 by a vote of 303 to 108.
    On September 17, 2008, the Committee on Environment and 
Public Works of the Senate approved and ordered S. 3617, the 
``Water Infrastructure Financing Act'', reported favorably to 
the Senate. This legislation authorized $20 billion for the 
Clean Water SRF program and $2 billion for grants to 
municipalities to control combined sewer overflows and sanitary 
sewer overflows under section 221 of the Clean Water Act. On 
September 26, 2008, the Committee on Environment and Public 
Works reported the bill to the Senate. S. Rept. 110-509. No 
further action was taken on H.R. 720, as passed by the House, 
or S. 3617, as reported by the Environment and Public Works 
Committee.
    On March 3, 2009, Chairman James L. Oberstar introduced 
H.R. 1262, the Water Quality Investment Act of 2009. On March 
4, 2009, the Subcommittee on Water Resources and Environment 
met in open session to consider H.R. 1262 and recommended the 
bill favorably to the Committee on Transportation and 
Infrastructure by voice vote. On March 5, 2009, the Committee 
on Transportation and Infrastructure met in open session to 
consider H.R. 1262 and adopted, by voice vote, an amendment 
that made a technical change to the bill. The Committee ordered 
the bill, as amended, reported favorably to the House by voice 
vote.

              TITLE II--ALTERNATIVE WATER SOURCE PROJECTS

    On March 16, 2005, the Subcommittee on Water Resources and 
Environment of the Committee on Transportation and 
Infrastructure held a hearing on Member project requests for 
the Water Resources Development Act of 2005. Among the Member 
project requests discussed at the hearing and received by the 
Subcommittee were requests for water reuse projects to augment 
water supplies, although single-purpose municipal and 
industrial water supply projects are not a primary mission of 
the U.S. Army Corps of Engineers and are cost-shared as 100 
percent reimbursable.
    In the 109th Congress, H.R. 1359 was introduced on March 
17, 2005, and referred to the Committee on Transportation and 
Infrastructure. The Committee on Transportation and 
Infrastructure met in open session on May 18, 2005, to consider 
H.R. 1359 and other legislation. The Committee adopted by voice 
vote an amendment in the nature of a substitute. The amendment 
removed the fiscal year limitation on the authorization of 
appropriations, leaving the total amount authorized at $125 
million. The Committee ordered the bill, as amended, reported 
to the House by voice vote. On July 13, 2005, the Committee 
reported H.R. 1359 to the House. H. Rept. 109-167. No further 
action was taken on this bill.
    In the 110th Congress, Representative Jerry McNerney 
introduced H.R. 700 on January 29, 2007. This legislation was 
modeled after H.R. 1359, as approved by the Committee on May 
18, 2005, and authorized appropriations of $125 million for EPA 
to provide grants for alternative water source projects to meet 
critical water supply needs. On January 31, 2007, the 
Subcommittee on Water Resources and Environment considered H.R. 
700 and recommended the bill 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 reported to the House by 
voice vote. On February 16, 2007, the Committee reported H.R. 
700 to the House. H. Rept. 110-15. On March 8, 2007, the House 
of Representatives passed H.R. 700 by a vote of 368 to 59. No 
further action was taken on this legislation.
    On January 27, 2009, Representative Jerry McNerney 
introduced H.R. 700. This legislation is modeled after H.R. 
700, as approved by the Committee on February 7, 2007 and 
passed by the House on March 8, 2007. The text of H.R. 700 is 
incorporated as Title II of H.R. 1262. Further action is listed 
under the description of Title I of H.R. 1262.

                TITLE III--SEWER OVERFLOW CONTROL GRANTS

    Over the last four Congresses, the Committee on 
Transportation and Infrastructure has approved legislation to 
reauthorize appropriations for grants to address combined sewer 
overflows and sanitary sewer overflows.
    In the 108th Congress, the Subcommittee held a legislative 
hearing on H.R. 784, the ``Water Quality Investment Act of 
2003'', on July 8, 2004. On July 15, 2004, the Subcommittee 
adopted by voice vote an amendment to H.R. 784 in the nature of 
a substitute. The amendment authorized $250 million for each of 
fiscal years 2005 through 2010. The amendment also made other 
changes to section 221 to update the authority and to ensure 
that States may administer these grants in the same way that 
they administer loans from the State Revolving Loan Funds. The 
Subcommittee recommended the bill, as amended, favorably to the 
Committee on Transportation and Infrastructure, by voice vote. 
On July 21, 2004, the Committee on Transportation and 
Infrastructure met in open session, and ordered the bill, as 
amended by the Subcommittee, reported to the House by voice 
vote. On September 13, 2004, the Committee reported H.R. 784 to 
the House. H. Rept. 108-675. No further action was taken on 
this legislation.
    In the 109th Congress, the Committee on Transportation and 
Infrastructure met on May 18, 2005, to consider H.R. 624, a 
bill to authorize appropriations for sewer overflow control 
grants. H.R. 624 was identical to H.R. 784, the Water Quality 
Investment Act of 2003, as reported by the Committee in the 
108th Congress, with the exception of updating the 
authorization years from 2005 through 2010 to 2006 through 
2011. The Committee on Transportation and Infrastructure met in 
open session and ordered H.R. 624 reported to the House by 
voice vote. On July 13, 2005, the Committee reported H.R. 624 
to the House. H. Rept. 109-166. No further action was taken on 
this legislation.
    In the 110th Congress, Representative Bill Pascrell, Jr. 
introduced H.R. 569 on January 18, 2007. This legislation was 
modeled after H.R. 624, as approved by the Committee on May 18, 
2005, and authorized appropriations of $3 billion over six 
years for grants to address combined sewer overflows and 
sanitary sewer overflows. On January 31, 2007, the Subcommittee 
on Water Resources and Environment considered H.R. 569, and 
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 to the House by voice vote. On February 
16, 2007, the Committee reported H.R. 569 to the House. H. 
Rept. 110-16. On March 7, 2007, the House of Representatives 
approved H.R. 569 by a vote of 367 to 58.
    On September 17, 2008, the Committee on Environment and 
Public Works of the Senate approved and ordered S. 3617, the 
``Water Infrastructure Financing Act'', reported favorably to 
the Senate. This legislation authorized $20 billion for the 
Clean Water SRF program and $2 billion for grants to 
municipalities to control combined sewer overflows and sanitary 
sewer overflows under section 221 of the Clean Water Act. On 
September 26, 2008, the Committee on Environment and Public 
Works reported the bill to the Senate. S. Rept. 110-509. No 
further action was taken on H.R. 569, as passed by the House, 
or S. 3617, as reported by the Environment and Public Works 
Committee.
    On February 4, 2009, Representative Bill Pascrell, Jr. 
introduced H.R. 895. This legislation is modeled after H.R. 
569, as approved by the Committee on February 7, 2007. The text 
of H.R. 895 is incorporated as title III of H.R. 1262. Further 
action is listed under the description of Title I of H.R. 1262.

   TITLE IV--MONITORING, REPORTING, AND PUBLIC NOTIFICATION OF SEWER 
                               OVERFLOWS

    In the 109th Congress, Representative Timothy H. Bishop 
introduced H.R. 1720, the Raw Sewage Overflow Community Right-
to-Know Act. No further action was taken on the legislation.
    In the 110th Congress, Representative Timothy H. Bishop 
introduced H.R. 2452, the Raw Sewage Overflow Community Right-
to-Know Act, which was modeled after H.R. 1720 from the 109th 
Congress.
    On October 16, 2007, the Subcommittee on Water Resources 
and Environment held a hearing on the ``Raw Sewage Overflow 
Community Right-to-Know Act'' in which representatives from the 
Environmental Protection Agency, state and local government 
officials, public health officials, and other stakeholders 
testified on the issue of public notification of sewer 
overflow.
    On May 7, 2008, the Subcommittee on Water Resources and 
Environment met to consider H.R. 2452. The Subcommittee 
adopted, by voice vote, an amendment in the nature of a 
substitute that made several technical and clarifying changes 
to the bill. The Subcommittee approved H.R. 2452, as amended, 
and favorably recommended it to the Committee on Transportation 
and Infrastructure by voice vote. On May 15, 2008, the 
Committee on Transportation and Infrastructure met in open 
session, and ordered H.R. 2452, as amended, reported to the 
House by voice vote. On June 19, 2008, the Committee reported 
H.R. 2452 to the House. H. Rept. 110-723.
    On June 23, 2008, the House of Representatives considered 
H.R. 2452, with minor modifications from the version that was 
favorably reported from the Committee on Transportation and 
Infrastructure. These modifications were to address a few 
technical and transitional concerns that were unresolved before 
the Committee markup, as well as to provide a mechanism for 
States with active notification programs to petition EPA for 
the ability to carry out the existing programs provided these 
programs are determined to be functionally equivalent to the 
national standard for State notification programs. On June 23, 
2008, the House of Representatives approved H.R. 2452 by voice 
vote. No further action was taken on this legislation.
    On January 28, 2009, Representative Timothy H. Bishop 
introduced H.R. 752, the Sewage Overflow Community Right to 
Know Act. This legislation is modeled after H.R. 2452, as 
passed the House of Representatives on June 23, 2008, with 
minor changes. The text of sections 2 and 3 of H.R. 752 is 
incorporated as Title IV of H.R. 1262. Further action is listed 
under the description of Title I of H.R. 1262.

              TITLE V--GREAT LAKES LEGACY REAUTHORIZATION

    In the 110th Congress, the Subcommittee on Water Resources 
and Environment held a hearing, entitled ``Reauthorization of 
the Great Lakes Legacy Act'' on May 21, 2008.
    On July 10, 2008, Representative Vernon Ehlers introduced 
H.R. 6460, the ``Great Lakes Legacy Reauthorization Act of 
2008''. No similar legislative proposal was introduced in 
previous Congresses.
    On July 31, 2008, the Committee on Transportation and 
Infrastructure met in open session to consider H.R. 6460. The 
Committee adopted by voice vote an amendment in the nature of a 
substitute that made several technical changes to the bill. The 
Committee ordered the bill, as amended, reported favorably to 
the House by voice vote with a quorum present. On September 18, 
2008, the Committee reported H.R. 6460 to the House. H. Rept. 
110-849 Part 1. On September 18, 2008, the House of 
Representatives approved H.R. 6460 by a vote of 371 to 20. On 
September 25, 2008, the United States Senate approved H.R. 6460 
with an amendment that: (1) reduced the authorization of 
appropriations for projects to remediate contaminated sediments 
under section 118(c)(12)(H) from $150 million annually for 
fiscal years 2009 through 2013 to $50 million annually for 
fiscal years 2009 and 2010; and (2) reduced the authorization 
for section 106(b) of the Great Lakes Legacy Act of 2002 from 
$5 million for each of the fiscal years 2009 through 2013 to $3 
million for fiscal years 2009 and 2010. On September 28, 2008, 
the House of Representatives approved H.R. 6460, as amended by 
the Senate. This legislation was signed by the President on 
October 8, 2008, as Pubic Law 110-365.
    Title V of H.R. 1262 would increase the authorization of 
appropriations for projects to remediate contaminated sediment 
under section 118(c)(12)(H) to $150 million annually through 
2014, and would increase the authorization of appropriations 
for section 106(b) of the Great Lakes Legacy Act of 2002 to $5 
million for each of fiscal years 2010 through 2014. Further 
action is listed under the description of Title I of H.R. 1262.

                              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. There 
were no recorded votes taken in connection with consideration 
of H.R. 1262 or ordering it reported. A motion to order H.R. 
1262, as amended, reported favorably to the House was agreed to 
by voice vote with a quorum present.

                      Committee Oversight Findings

    With respect to the requirements of clause 3(c)(1) 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: (1) 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, 
reduce, treat, or reuse municipal stormwater, agricultural 
stormwater, and return flows from irrigated agriculture; for 
water conservation projects; and for the development and 
implementation of watershed pilot projects under section 122 of 
the Act; for alternative water source projects to meet critical 
water supply needs; for control combined sewer overflows and 
sanitary sewer overflows; and for projects to remediate 
contaminated sediment in the Great Lakes areas of concern; (2) 
reauthorizing funding, at increased levels, for EPA research 
grants and state management assistance; and (3) providing a 
uniform, national standard for monitoring, reporting, and 
public notification of municipal combined sewer overflows and 
sanitary sewer overflows.
    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. 
1262 from the Director of the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, March 9, 2009.
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. 1262, the Water 
Quality Investment Act of 2009.
    lf 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,
                                      Douglas W. Elmendorf,
                                                          Director.
    Enclosure.

H.R. 1262--Water Quality Investment Act of 2009

    Summary: CB0 estimates that implementing this legislation 
would cost about $10.6 billion over the next five years and 
$17.7 billion over the next 10 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.
    In addition to the effects on discretionary spending, 
enacting H.R. 1262 would affect both federal revenues and 
offsetting receipts. The Joint Committee on Taxation (JCT) 
estimates that enacting H.R. 1262 would reduce revenues by $85 
million over the 2010-2014 period and by $700 million over the 
2010-2019 period. CBO estimates that enacting this legislation 
also would increase tonnage charges on vessels entering the 
United States, effective for fiscal years 2010 through 2019. 
Those charges would increase offsetting receipts, which are 
credits against direct spending, by $700 million over that 
period.
    The legislation's effects on direct spending and revenues 
over the 2009-2013 and 2009-2018 periods arc relevant for 
enforcing pay-as-you-go rules under the current budget 
resolution. CBO estimates that enacting this legislation would 
reduce revenues by about $36 million over that five-year period 
and by $547 million over the 2009-2018 period. Enacting the 
bill also would reduce direct spending by about $266 million 
over the 2009-2013 period and about $625 million over the 2009-
2018 period. Together, those changes would yield net pay-as-
you-go savings of $230 million over five years and about $78 
million over 10 years.
    H.R. 1262 contains several intergovernmental mandates as 
defined in the Unfunded Mandates Reform Act (UMRA), including 
monitoring, reporting, and public notification requirements for 
publicly owned treatment systems. The bill also includes an 
additional reporting requirement for states. CBO estimates that 
the annual cost of complying with those mandates would likely 
exceed the threshold established in UMRA ($69 million for 
intergovernmental mandates in 2009, adjusted annually for 
inflation).
    H.R. 1262 would impose private-sector mandates, as defined 
in UMRA, on operators of vessels entering the United States by 
increasing vessel tonnage duties over the 2010-2019 period. CBO 
estimates that the direct costs of complying with those 
mandates would fall below the annual threshold established in 
UMRA for private-sector mandates ($139 million in 2009, 
adjusted annually for inflation).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 1262 is shown in the following table. 
The costs of this legislation fall within budget function 300 
(natural resources and environment).

                                                    TABLE 1. ESTIMATED BUDGETARY EFFECTS OF H.R. 1262
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            By fiscal year, in millions of dollars--
                                       -----------------------------------------------------------------------------------------------------------------
                                         2009    2010    2011    2012    2013    2014    2015     2016     2017     2018     2019   2009-2014  2009-2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 CHANGES IN REVENUE \1\

Estimated Revenues \2\................       0       *      -2      -9     -25     -49     -77     -107     -131     -147     -153       -85       -700

                                                               CHANGES IN DIRECT SPENDING

Vessel Tonnage Charges \3\
    Estimated Budget Authority........       0     -65     -66     -67     -68     -69     -70      -72      -73      -75      -75      -335       -700
    Estimated Outlays.................       0     -65     -66     -67     -68     -69     -70      -72      -73      -75      -75      -335       -700

                                                      CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Authorization Level...................       0   3,275   3,625   3,775   3,925   4,125       0        0        0        0        0    18,725     18,725
Estimated Outlays.....................       0     625   1,369   2,265   2,938   3,370   2,915    2,125    1,201      591      297    10,567     17,696
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Estimate provided by the Joint Committee on Taxation.
\2\ Negative numbers reflect a reduction in receipts.
\3\ Negative numbers reflect an increase in offsetting receipts (a credit against direct spending).

NOTE: * revenue loss of less than $500,000.

    Basis of estimate: For this estimate, CBO assumes that H.R. 
1262 will be enacted in fiscal year 2009, 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

    H.R. 1262 would increase the funds available under the 
clean water State Revolving Fund (SRF) program, which would 
result in some states leveraging SRF grants by issuing 
additional tax-exempt bonds. The JCT estimates that those 
additional bonds would result in reductions in revenue totaling 
$700 million over the next 10 years (see Table 1).

Direct spending

    This legislation would increase, through fiscal year 2019, 
per-ton duties imposed on vessels arriving at U.S. ports from 
foreign ports. For vessels arriving from such ports in the 
western hemisphere, the rate would rise to 9 cents per ton 
(with a maximum of 45 cents per ton per year); for vessels 
arriving from other foreign ports, the rate would rise to 27 
cents (with a maximum of $1.35 per year). The Department of 
Homeland Security currently collects 2 cents per ton (with a 
maximum of 10 cents per ton per year) on vessels arriving from 
western hemisphere ports and 6 cents (with a maximum of 30 
cents per ton per year) on those arriving from other foreign 
ports.
    CBO estimates that enacting this legislation would increase 
offsetting receipts from tonnage duties by $65 million to $75 
million a year through 2019. Total estimated collections over 
the 2010-2019 period would be $700 million (see Table 1). This 
estimate is based on the additional receipts from tonnage 
duties collected before fiscal year 2002 (when those rates were 
temporarily increased to the levels specified in H.R. 1262), 
including an adjustment for changes in shipping traffic 
experienced since that time.

Spending subject to appropriation

    This legislation would authorize appropriations totaling 
about $18.7 billion over the next five years for EPA's water 
infrastructure and grant programs. Amounts authorized to be 
appropriated for individual programs are shown in Table 2.
    H.R. 1262 would authorize the appropriation of $13.8 
billion over the 2010-2014 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 amendments to 
this grant program, including allowing states to extend the 
repayment terms for SRF loans and expanding the types of 
projects eligible for assistance.

 TABLE 2.--AMOUNTS AUTHORIZED TO BE APPROPRIATED FOR EPA PROGRAMS UNDER H.R. 1262, THE WATER QUALITY INVESTMENT
                                                   ACT OF 2009
----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year in millions of dollars--
                                                         -------------------------------------------------------
                                                            2010     2011     2012     2013     2014   2010-2014
----------------------------------------------------------------------------------------------------------------
Clean Water SRF Grants..................................    2,400    2,700    2,800    2,900    3,000     13,800
Sewer Overflow Grants...................................      250      300      350      400      500      1,800
State Management Assistance.............................      300      300      300      300      300      1,500
Great Lakes Remediation.................................      150      150      150      150      150        750
Technical Assistance for Rural/Small Treatment Works....      100      100      100      100      100        500
Alternative Water Source Projects.......................       50       50       50       50       50        250
Watershed Pilot Projects................................       20       20       20       20       20        100
Great Lakes Research and Development....................        5        5        5        5        5         25
      Total Authorization Level.........................    3,275    3,625    3,775    3,925    4,125    18,725
----------------------------------------------------------------------------------------------------------------
Note: EPA = Environmental Protection Agency; SRF = state revolving fund.

    This legislation also would authorize the appropriation of 
$1.8 billion over the 2010-2014 period for EPA to make grants 
to states to address sewage overflows (that is, the discharge 
of untreated wastewater into waterways). In addition, H.R. 1262 
would authorize the appropriation of $1.5 billion over the 
2010-2014 period for EPA to make grants to states to support 
various activities associated with implementing state clean 
water programs; those funds would be available to pay the 
salaries of personnel working on water quality issues, 
establish regulations, and enforce clean water laws.
    All of the remaining authorizations in the bill would total 
about $1.6 billion over the next five years. That funding would 
be used for various other purposes, including support for 
projects aimed at cleaning up certain areas of the Great Lakes 
region where contamination has settled into sediments at the 
bottom of the lakes, and grants to nonprofit organizations to 
provide technical assistance, such as training communities in 
methods for treating water.
    Estimated impact on state, local, and tribal governments: 
H.R. 1262 would require treatment plants to comply with a 
number of new requirements, Those requirements are not 
conditions of federal assistance, and consequently, they would 
be intergovernmental mandates as defined in UMRA. Specifically, 
the bill would require:
           Institute and utilize a monitoring program 
        for sewer overflows, including combined sewer overflows 
        and sanitary sewer overflows;
           Notify the public of a sewer overflow within 
        24 hours;
           Notify public health authorities and other 
        affected entities, such as public water systems, if 
        there is an imminent and substantial risk to human 
        health due to a sewer overflow;
           Provide a report of an overflow within 24 
        hours to the state or to the Administrator of EPA;
           Report each sewer overflow on its monthly 
        discharge monitoring report to EPA or the treatment 
        plant's state. This report must include the magnitude, 
        cause, and mitigation efforts for the specific 
        overflows; and
           Submit an annual report to EPA or the state 
        on the number of overflows in a calendar year, 
        including the details of magnitude, duration, location, 
        potentially affected receiving waters, and mitigation 
        efforts. If a state receives a report under this 
        requirement, that state must submit to EPA a summary of 
        the report.
    Without knowing the nature of the regulations that EPA 
would issue as a result of this bill, CBO cannot make a precise 
estimate of the costs of complying with the mandates. Based on 
information from affected entities, however, we estimate that 
such costs would likely exceed the threshold established in 
UMRA. The bill's new requirements would involve additional 
personnel costs and could necessitate new infrastructure and 
engineering expertise. According to EPA and the National 
Association of Clean Water Agencies, over 16,000 treatment 
plants operate in the United States, and each of those entities 
could be affected by the permitting requirements in H.R. 1262. 
Infrastructure improvements, if required by the regulations, 
could be particularly expensive. Given the large number of 
affected entities, even a small increase in additional costs 
(less than $4,500 per entity annually) would result in costs 
that exceed the threshold for intergovernmental mandates in at 
least one of the next five years ($69 million in 2009, adjusted 
annually for inflation).
    Estimated impact on the private sector: H.R. 1262 would 
impose private-sector mandates on operators of vessels entering 
the United States by increasing vessel tonnage duties over the 
2010-2019 period. The cost of complying with those mandates 
would be the incremental amounts paid to the federal government 
as a result of the higher rates. CBO estimates that the 
incremental cost for vessel operators would amount to about $67 
million per year during the first live years the mandate is in 
effect. Consequently, the direct cost of the mandates would 
fall below the annual threshold established in UMRA for 
private-sector mandates ($139 million in 2009, adjusted 
annually for inflation).
    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: Ryan Miller; Impact on the Private Sector: Amy 
Petz.
    Estimate approved by: Theresa Gullo, 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. 1262, the Water Quality Investment Act 
of 2009, 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. 1262 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).
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         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 eligible projects 
                described in section 603(c);
                  (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.

           *       *       *       *       *       *       *

  (q)(1) * * *

           *       *       *       *       *       *       *

  (4) Small Flows Clearinghouse.--Notwithstanding section 
205(d) of this Act, from amounts that are set aside for a 
fiscal year under section 205(i) of this Act and are not 
obligated by the end of the 24-month period of availability for 
such amounts under section 205(d), the Administrator shall make 
available [$1,000,000] $3,000,000 or such unobligated amount, 
whichever is less, to support a national clearinghouse within 
the Environmental Protection Agency to collect and disseminate 
information on small flows of sewage and innovative or 
alternative wastewater treatment processes and techniques, 
consistent with paragraph (3). This paragraph shall apply with 
respect to amounts set aside under section 205(i) for which the 
24-month period of availability referred to in the preceding 
sentence ends on or after September 30, [1986] 2011.

           *       *       *       *       *       *       *

  (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 $100,000,000 for each of 
fiscal years 2010 through 2014 for carrying out subsections 
(b)(3), (b)(8), and (g), 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).

           *       *       *       *       *       *       *


                 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 2009, and $300,000,000 for each of 
        fiscal years 2010 through 2014;

           *       *       *       *       *       *       *


SEC. 118. GREAT LAKES.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Great Lakes Management.--
          (1) * * *

           *       *       *       *       *       *       *

          (12) Remediation of sediment contamination in areas 
        of concern.--
                  (A) * * *

           *       *       *       *       *       *       *

                  (H) Authorization of appropriations.--
                          [(i) In general.--In addition to 
                        other amounts authorized under this 
                        section, there is authorized to be 
                        appropriated to carry out this 
                        paragraph $50,000,000 for each of 
                        fiscal years 2004 through 2010.]
                          (i) In general.--In addition to other 
                        amounts authorized under this section, 
                        there is authorized to be appropriated 
                        to carry out this paragraph--
                                  (I) $50,000,000 for each of 
                                the fiscal years 2004 through 
                                2009; and
                                  (II) $150,000,000 for each of 
                                the fiscal years 2010 through 
                                2014.

           *       *       *       *       *       *       *

          (13) Public information program.--
                  (A) * * *
                  (B) Authorization of appropriations.--There 
                is authorized to be appropriated to carry out 
                this paragraph $1,000,000 for each of fiscal 
                years 2004 through [2010] 2014.

           *       *       *       *       *       *       *


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] to manage, 
        reduce, treat, or reuse municipal stormwater, 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.
          (4) Integrated water resource plan.--The development 
        of an integrated water resource plan for the 
        coordinated management and protection of surface water, 
        ground water, and stormwater resources on a watershed 
        or subwatershed basis to meet the objectives, goals, 
        and policies of this Act.

           *       *       *       *       *       *       *

  (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 2014. Such funds shall remain 
        available until expended.

           *       *       *       *       *       *       *

  (d) Report to Congress.--Not later than [5 years after the 
date of enactment of this section,] October 1, 2011, 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.

           *       *       *       *       *       *       *


SEC. 220. PILOT PROGRAM FOR ALTERNATIVE WATER SOURCE PROJECTS.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Selection of Projects.--
          (1) * * *
          (2) Additional consideration.--In making grants under 
        this section, the Administrator shall consider whether 
        the project is located within the boundaries of a State 
        or area referred to in section 1 of the Reclamation Act 
        of June 17, 1902 (32 Stat . 385), and within the 
        geographic scope of the reclamation and reuse program 
        conducted under the Reclamation Projects Authorization 
        and Adjustment Act of 1992 (43 U.S.C. 390h et seq.) or 
        whether the project is located in an area which is 
        served by a public water system serving 10,000 
        individuals or fewer.

           *       *       *       *       *       *       *

  (j) Authorization of Appropriations.--There is authorized to 
be appropriated to carry out this section a total of 
[$75,000,000 for fiscal years 2002 through 2004] $50,000,000 
for each of fiscal years 2010 through 2014. Such sums shall 
remain available until expended.

SEC. 221. SEWER OVERFLOW CONTROL GRANTS.

  (a) * * *

           *       *       *       *       *       *       *

  [(e) Administrative Reporting Requirements.--If a project 
receives grant assistance under subsection (a) and loan 
assistance from a State water pollution control revolving fund 
and the loan assistance is for 15 percent or more of the cost 
of the project, the project may be administered in accordance 
with State water pollution control revolving fund 
administrative reporting requirements for the purposes of 
streamlining such requirements.]
  (e) Administrative Requirements.--A project that receives 
assistance under this section shall be carried out subject to 
the same requirements as a project that receives assistance 
from a State water pollution control revolving fund under title 
VI, except to the extent that the Governor of the State in 
which the project is located determines that a requirement of 
title VI is inconsistent with the purposes of this section.
  (f) Authorization of Appropriations.--There is authorized to 
be appropriated to carry out [this section $750,000,000 for 
each of fiscal years 2002 and 2003.] this section $250,000,000 
for fiscal year 2010, $300,000,000 for fiscal year 2011, 
$350,000,000 for fiscal year 2012, $400,000,000 for fiscal year 
2013, and $500,000,000 for fiscal year 2014. Such sums shall 
remain available until expended.
  [(g) Allocation of Funds.--
          [(1) Fiscal year 2002.--Subject to subsection (h), 
        the Administrator shall use the amounts appropriated to 
        carry out this section for fiscal year 2002 for making 
        grants to municipalities and municipal entities under 
        subsection (a)(2), in accordance with the criteria set 
        forth in subsection (b).
          [(2) Fiscal year 2003.--Subject to subsection (h), 
        the Administrator shall use the amounts appropriated to 
        carry out this section for fiscal year 2003 as follows:
                  [(A) Not to exceed $250,000,000 for making 
                grants to municipalities and municipal entities 
                under subsection (a)(2), in accordance with the 
                criteria set forth in subsection (b).
                  [(B) All remaining amounts for making grants 
                to States under subsection (a)(1), in 
                accordance with a formula to be established by 
                the Administrator, after providing notice and 
                an opportunity for public comment, that 
                allocates to each State a proportional share of 
                such amounts based on the total needs of the 
                State for municipal combined sewer overflow 
                controls and sanitary sewer overflow controls 
                identified in the most recent survey conducted 
                pursuant to section 516(b)(1).]
  (g) Allocation of Funds.--
          (1) Fiscal year 2010.--Subject to subsection (h), the 
        Administrator shall use the amounts appropriated to 
        carry out this section for fiscal year 2010 for making 
        grants to municipalities and municipal entities under 
        subsection (a)(2) in accordance with the criteria set 
        forth in subsection (b).
          (2) Fiscal year 2011 and thereafter.--Subject to 
        subsection (h), the Administrator shall use the amounts 
        appropriated to carry out this section for fiscal year 
        2011 and each fiscal year thereafter for making grants 
        to States under subsection (a)(1) in accordance with a 
        formula to be established by the Administrator, after 
        providing notice and an opportunity for public comment, 
        that allocates to each State a proportional share of 
        such amounts based on the total needs of the State for 
        municipal combined sewer overflow controls and sanitary 
        sewer overflow controls identified in the most recent 
        survey conducted pursuant to section 516.

           *       *       *       *       *       *       *

  (i) Reports.--Not later than December 31, [2003] 2012, and 
periodically thereafter, the Administrator shall transmit to 
Congress a report containing recommended funding levels for 
grants under this section. The recommended funding levels shall 
be sufficient to ensure the continued expeditious 
implementation of municipal combined sewer overflow and 
sanitary sewer overflow controls nationwide.

           *       *       *       *       *       *       *


TITLE IV--PERMITS AND LICENSES

           *       *       *       *       *       *       *


            NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM

  Sec. 402. (a) * * *

           *       *       *       *       *       *       *

  (s) Sewer Overflow Monitoring, Reporting, and 
Notifications.--
          (1) General requirements.--After the last day of the 
        180-day period beginning on the date on which 
        regulations are issued under paragraph (4), a permit 
        issued, renewed, or modified under this section by the 
        Administrator or the State, as the case may be, for a 
        publicly owned treatment works shall require, at a 
        minimum, beginning on the date of the issuance, 
        modification, or renewal, that the owner or operator of 
        the treatment works--
                  (A) institute and utilize a feasible 
                methodology, technology, or management program 
                for monitoring sewer overflows to alert the 
                owner or operator to the occurrence of a sewer 
                overflow in a timely manner;
                  (B) in the case of a sewer overflow that has 
                the potential to affect human health, notify 
                the public of the overflow as soon as 
                practicable but not later than 24 hours after 
                the time the owner or operator knows of the 
                overflow;
                  (C) in the case of a sewer overflow that may 
                imminently and substantially endanger human 
                health, notify public health authorities and 
                other affected entities, such as public water 
                systems, of the overflow immediately after the 
                owner or operator knows of the overflow;
                  (D) report each sewer overflow on its 
                discharge monitoring report to the 
                Administrator or the State, as the case may be, 
                by describing--
                          (i) the magnitude, duration, and 
                        suspected cause of the overflow;
                          (ii) the steps taken or planned to 
                        reduce, eliminate, or prevent 
                        recurrence of the overflow; and
                          (iii) the steps taken or planned to 
                        mitigate the impact of the overflow; 
                        and
                  (E) annually report to the Administrator or 
                the State, as the case may be, the total number 
                of sewer overflows in a calendar year, 
                including--
                          (i) the details of how much 
                        wastewater was released per incident;
                          (ii) the duration of each sewer 
                        overflow;
                          (iii) the location of the overflow 
                        and any potentially affected receiving 
                        waters;
                          (iv) the responses taken to clean up 
                        the overflow; and
                          (v) the actions taken to mitigate 
                        impacts and avoid further sewer 
                        overflows at the site.
          (2) Exceptions.--
                  (A) Notification requirements.--The 
                notification requirements of paragraphs (1)(B) 
                and (1)(C) shall not apply to a sewer overflow 
                that is a wastewater backup into a single-
                family residence.
                  (B) Reporting requirements.--The reporting 
                requirements of paragraphs (1)(D) and (1)(E) 
                shall not apply to a sewer overflow that is a 
                release of wastewater that occurs in the course 
                of maintenance of the treatment works, is 
                managed consistently with the treatment works' 
                best management practices, and is intended to 
                prevent sewer overflows.
          (3) Report to epa.--Each State shall provide to the 
        Administrator annually a summary of sewer overflows 
        that occurred in the State.
          (4) Rulemaking by epa.--Not later than one year after 
        the date of enactment of this subsection, the 
        Administrator, after providing notice and an 
        opportunity for public comment, shall issue regulations 
        to implement this subsection, including regulations 
        to--
                  (A) establish a set of criteria to guide the 
                owner or operator of a publicly owned treatment 
                works in--
                          (i) assessing whether a sewer 
                        overflow has the potential to affect 
                        human health or may imminently and 
                        substantially endanger human health; 
                        and
                          (ii) developing communication 
                        measures that are sufficient to give 
                        notice under paragraphs (1)(B) and 
                        (1)(C); and
                  (B) define the terms ``feasible'' and 
                ``timely'' as such terms apply to paragraph 
                (1)(A), including site specific conditions.
          (5) Approval of state notification programs.--
                  (A) Requests for approval.--
                          (i) In general.--After the date of 
                        issuance of regulations under paragraph 
                        (4), a State may submit to the 
                        Administrator evidence that the State 
                        has in place a legally enforceable 
                        notification program that is 
                        substantially equivalent to or exceeds 
                        the requirements of paragraphs (1)(B) 
                        and (1)(C).
                          (ii) Program review and 
                        authorization.--If the evidence 
                        submitted by a State under clause (i) 
                        shows the notification program of the 
                        State to be substantially equivalent to 
                        or exceeds the requirements of 
                        paragraphs (1)(B) and (1)(C), the 
                        Administrator shall authorize the State 
                        to carry out such program instead of 
                        the requirements of paragraphs (1)(B) 
                        and (1)(C).
                          (iii) Factors for determining 
                        substantial equivalency.--In carrying 
                        out a review of a State notification 
                        program under clause (ii), the 
                        Administrator shall take into account 
                        the scope of sewer overflows for which 
                        notification is required, the length of 
                        time during which notification must be 
                        made, the scope of persons who must be 
                        notified of sewer overflows, the scope 
                        of enforcement activities ensuring that 
                        notifications of sewer overflows are 
                        made, and such other factors as the 
                        Administrator considers appropriate.
                  (B) Review period.--If a State submits 
                evidence with respect to a notification program 
                under subparagraph (A)(i) on or before the last 
                day of the 30-day period beginning on the date 
                of issuance of regulations under paragraph (4), 
                the requirements of paragraphs (1)(B) and 
                (1)(C) shall not begin to apply to a publicly 
                owned treatment works located in the State 
                until the date on which the Administrator 
                completes a review of the notification program 
                under subparagraph (A)(ii).
                  (C) Withdrawal of authorization.--If the 
                Administrator, after conducting a public 
                hearing, determines that a State is not 
                administering and enforcing a State 
                notification program authorized under 
                subparagraph (A)(ii) in accordance with the 
                requirements of this paragraph, the 
                Administrator shall so notify the State and, if 
                appropriate corrective action is not taken 
                within a reasonable time, not to exceed 90 
                days, the Administrator shall withdraw 
                authorization of such program and enforce the 
                requirements of paragraphs (1)(B) and (1)(C) 
                with respect to the State.
          (6) Special rules concerning application of 
        notification requirements.--After the last day of the 
        30-day period beginning on the date of issuance of 
        regulations under paragraph (4), the requirements of 
        paragraphs (1)(B) and (1)(C) shall--
                  (A) apply to the owner or operator of a 
                publicly owned treatment works and be subject 
                to enforcement under section 309, and
                  (B) supersede any notification requirements 
                contained in a permit issued under this section 
                for the treatment works to the extent that the 
                notification requirements are less stringent 
                than the notification requirements of 
                paragraphs (1)(B) and (1)(C),
        until such date as a permit is issued, renewed, or 
        modified under this section for the treatment works in 
        accordance with paragraph (1).
          (7) Definitions.--In this subsection, the following 
        definitions apply:
                  (A) Sanitary sewer overflow.--The term 
                ``sanitary sewer overflow'' means an overflow, 
                spill, release, or diversion of wastewater from 
                a sanitary sewer system. Such term does not 
                include municipal combined sewer overflows or 
                other discharges from the combined portion of a 
                municipal combined storm and sanitary sewer 
                system and does not include wastewater backups 
                into buildings caused by a blockage or other 
                malfunction of a building lateral that is 
                privately owned. Such term includes overflows 
                or releases of wastewater that reach waters of 
                the United States, overflows or releases of 
                wastewater in the United States that do not 
                reach waters of the United States, and 
                wastewater backups into buildings that are 
                caused by blockages or flow conditions in a 
                sanitary sewer other than a building lateral.
                  (B) Sewer overflow.--The term ``sewer 
                overflow'' means a sanitary sewer overflow or a 
                municipal combined sewer overflow.
                  (C) Single-family residence.--The term 
                ``single-family residence'' means an individual 
                dwelling unit, including an apartment, 
                condominium, house, or dormitory. Such term 
                does not include the common areas of a multi-
                dwelling structure.

           *       *       *       *       *       *       *


TITLE V--GENERAL PROVISIONS

           *       *       *       *       *       *       *


                          GENERAL DEFINITIONS

  Sec. 502. Except as otherwise specifically provided, when 
used in this Act:
          (1) * * *

           *       *       *       *       *       *       *

          (26) 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 1987-2008.--The Administrator shall 
        reserve each fiscal year beginning after September 30, 
        1986, and ending before October 1, 2008, 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 2009 and thereafter.--For fiscal year 
        2009 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 (as defined in section 
                518(h));
                  (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) * * *

           *       *       *       *       *       *       *

          (6) treatment works eligible under section 603(c)(1) 
        of this Act which will be constructed in whole or in 
        part [before fiscal year 1995] with [funds directly 
        made available by capitalization grants under this 
        title and section 205(m) of this Act] 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, will meet 
        the requirements of, or otherwise be treated (as 
        determined by the Governor of the State) under sections 
        [201(b), 201(g)(1), 201(g)(2), 201(g)(3), 201(g)(5), 
        201(g)(6), 201(n)(1), 201(o), 204(a)(1), 204(a)(2), 
        204(b)(1), 204(d)(2), 211, 218, 511(c)(1), and 513] 211 
        and 511(c)(1) of this Act in the same manner as 
        treatment works constructed with assistance under title 
        II of this Act;

           *       *       *       *       *       *       *

          (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] standards, including 
        standards relating to the reporting of infrastructure 
        assets; [and]
          (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 that are considered program income 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 2011, 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 the 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 maximizes the potential for 
                efficient water use, reuse, and conservation, 
                and energy conservation, taking into account 
                the cost of constructing the project or 
                activity, the cost of operating and maintaining 
                the project or activity over its life, and the 
                cost of replacing the project or activity; and
                  (B) has considered, to the maximum extent 
                practicable and as determined appropriate by 
                the recipient, the costs and effectiveness of 
                other design, 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 
                constructing the project or activity, the cost 
                of operating and maintaining the project or 
                activity over its life, and the cost of 
                replacing the project or activity;
          (14) the State will use at least 10 percent of the 
        amount of each capitalization grant received by the 
        State under this title after September 30, 2010, 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) 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
          (16) 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, reduce, treat, or reuse 
        municipal stormwater, agricultural stormwater, and 
        return flows from irrigated agriculture;
          (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; and
          (8) 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;
          (8) to provide grants to owners and operators of 
        treatment works that serve a population of 10,000 or 
        fewer for obtaining 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 the total amount provided by 
        the State in grants under this paragraph for a fiscal 
        year may not exceed one percent of the total amount of 
        assistance provided by the State from the fund in the 
        preceding fiscal year, or 2 percent of the total amount 
        received by the State in capitalization grants under 
        this title in the preceding fiscal year, whichever 
        amount is greatest; and
          (9) to provide grants to owners and operators of 
        treatment works for conducting an assessment of the 
        energy and water consumption of the treatment works, 
        and evaluating potential opportunities for energy and 
        water conservation through facility operation and 
        maintenance, equipment replacement, and projects or 
        activities that promote the efficient use of energy and 
        water by the treatment works, except that the total 
        amount provided by the State in grants under this 
        paragraph for a fiscal year may not exceed one percent 
        of the total amount of assistance provided by the State 
        from the fund in the preceding fiscal year, or 2 
        percent of the total amount received by the State in 
        capitalization grants under this title in the preceding 
        fiscal year, whichever amount is greatest.

           *       *       *       *       *       *       *

  [(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 2011 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), whether such water quality 
                improvements would be realized without 
                assistance under this title, and whether the 
                proposed projects and activities would address 
                water quality impairments associated with 
                existing treatment works.
                  (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 shall 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 a process, material, 
                technique, or technology to address water-
                efficiency goals, address energy-efficiency 
                goals, mitigate stormwater runoff, or encourage 
                environmentally sensitive project planning, 
                design, and construction.
          (2) Affordability criteria.--
                  (A) Establishment.--On or before September 
                30, 2010, 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, 
        2009.

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 2010 and 2011.--Sums appropriated to 
        carry out this title for each of fiscal years 2010 and 
        2011 shall be allotted by the Administrator in 
        accordance with the formula used to allot sums 
        appropriated to carry out this title for fiscal year 
        2009.
          (2) Fiscal year 2012 and thereafter.--Sums 
        appropriated to carry out this title for fiscal year 
        2012 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, 2011, 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. 608. REQUIREMENTS FOR USE OF AMERICAN MATERIALS.

  (a) In General.--Notwithstanding any other provision of law, 
none of the funds made available by a State water pollution 
control revolving fund as authorized under this title may be 
used for the construction of treatment works unless the steel, 
iron, and manufactured goods used in such treatment works are 
produced in the United States.
  (b) Exceptions.--Subsection (a) shall not apply in any case 
in which the Administrator (in consultation with the Governor 
of the State) finds that--
          (1) applying subsection (a) would be inconsistent 
        with the public interest;
          (2) steel, iron, and manufactured goods are not 
        produced in the United States in sufficient and 
        reasonably available quantities and of a satisfactory 
        quality; or
          (3) inclusion of steel, iron, and manufactured goods 
        produced in the United States will increase the cost of 
        the overall project by more than 25 percent.
  (c) Public Notification and Written Justification for 
Waiver.--If the Administrator determines that it is necessary 
to waive the application of subsection (a) based on a finding 
under subsection (b), the Administrator shall--
          (1) not less than 15 days prior to waiving 
        application of subsection (a), provide public notice 
        and the opportunity to comment on the Administrator's 
        intent to issue such waiver; and
          (2) upon issuing such waiver, publish in the Federal 
        Register a detailed written justification as to why the 
        provision is being waived.
  (d) Consistency With International Agreements.--This section 
shall be applied in a manner consistent with United States 
obligations under international agreements.

SEC. [607.] 609. 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) $2,400,000,000 for fiscal year 2010;
          (2) $2,700,000,000 for fiscal year 2011;
          (3) $2,800,000,000 for fiscal year 2012;
          (4) $2,900,000,000 for fiscal year 2013; and
          (5) $3,000,000,000 for fiscal year 2014.
                              ----------                              


                      TITLE 46, UNITED STATES CODE

Subtitle                                                           Sec. 
     * * * * * * *
      CLEARANCE, TONNAGE TAXES, AND DUTIES........................60101]
60101LEARANCE AND TONNAGE DUTIES......................................

           *       *       *       *       *       *       *


          [Subtitle VI--Clearance, Tonnage Taxes, and Duties]

               Subtitle VI--Clearance and Tonnage Duties

Chapter                                                             Sec.
      Arrival and Departure Requirements...........................60101
      Tonnage Taxes and Light Money...............................60301]
60301onnage Duties and Light Money....................................

           *       *       *       *       *       *       *


          CHAPTER 603--TONNAGE [TAXES] DUTIES AND LIGHT MONEY

Sec.
[60301. Regular tonnage taxes.
[60302. Special tonnage taxes.]
60301. Regular tonnage duties.
60302. Special tonnage duties.
60303. Light money.
[60304. Presidential suspension of tonnage taxes and light money.]
60304. Presidential suspension of tonnage duties and light money.
     * * * * * * *
60313. Liability in rem for costs.

Sec. 60301. Regular tonnage [taxes] duties

  [(a) Lower Rate.--A duty is imposed at the rate of 4.5 cents 
per ton, not to exceed a total of 22.5 cents per ton per year, 
for fiscal years 2006 through 2010, and 2 cents per ton, not to 
exceed a total of 10 cents per ton per year, for each fiscal 
year thereafter, 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 duty is imposed at the rate of 13.5 
cents per ton, not to exceed a total of 67.5 cents per ton per 
year, for fiscal years 2006 through 2010, and 6 cents per ton, 
not to exceed a total of 30 cents per ton per year, for each 
fiscal year thereafter, 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 2009;
                  (B) 9.0 cents per ton (but not more than a 
                total of 45 cents per ton per year) for fiscal 
                years 2010 through 2019; 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 2009;
                  (B) 27 cents per ton (but not more than a 
                total of $1.35 per ton per year) for fiscal 
                years 2010 through 2019; 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) * * *

           *       *       *       *       *       *       *


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.

Sec. 60313. Liability in rem for costs

  A vessel is liable in rem for any amount due under this 
chapter for that vessel and may be proceeded against for that 
liability in the United States district court for any district 
in which the vessel may be found.

           *       *       *       *       *       *       *

                              ----------                              


GREAT LAKES LEGACY ACT OF 2002

           *       *       *       *       *       *       *


TITLE I--GREAT LAKES

           *       *       *       *       *       *       *


SEC. 106. RESEARCH AND DEVELOPMENT PROGRAM.

  (a) * * *
  (b) Authorization of Appropriations.--
          [(1) In general.--In addition to any amounts 
        authorized under other provisions of law, there is 
        authorized to be appropriated to carry out this section 
        $3,000,000 for each of fiscal years 2004 through 2010.]
          (1) In general.--In addition to amounts authorized 
        under other laws, there is authorized to be 
        appropriated to carry out this section--
                  (A) $3,000,000 for each of the fiscal years 
                2004 through 2009; and
                  (B) $5,000,000 for each of the fiscal years 
                2010 through 2014.

           *       *       *       *       *       *       *


   MINORITY VIEWS OF MR. MICA, MR. BOOZMAN, MR. COBLE, MR. MACK, MR. 
SHUSTER, MR. MORAN, MR. DUNCAN, MR. MILLER, MR. EHLERS, MR. BROWN, MS. 
                      FALLIN, MR. LATTA, MR. OLSON

    The reauthorization of the Clean Water State Revolving Loan 
Fund (SRF) Program is an important step towards addressing the 
needs of our critical and aging wastewater infrastructure. We 
welcome the environmental improvements that many provisions in 
this bill would bring. However, while H.R. 1262 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 the Davis-Bacon Act's 
prevailing wage requirements in the SRF program.
    This new expansion of Davis-Bacon requirements would 
inflate the cost of clean water projects across our nation 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. The revolving, non-federal component of the State 
Revolving Funds has operated successfully since 1987 without 
the onerous application of Davis-Bacon, the effect of which 
will be further restriction of state and local control.
    It has become evident to the Minority on the Committee that 
the history of the Davis-Bacon Act is in need of clarification. 
The Act was created in 1931 with discriminatory intent to 
prevent low paid African Americans from taking jobs from other 
blue collar workers in New York. Even in recent history, only a 
few small and minority-owned firms could afford to pay the 
higher wages that the Davis-Bacon Act requires. As a result, 
they are disadvantaged by Davis-Bacon contracts, and many of 
them would not and will not pursue those contracts. Moreover, 
projects operating under Davis-Bacon requirements cannot hire 
local, lesser-skilled employees to work on these infrastructure 
projects, thereby limiting job opportunities for many workers 
and hindering state and local efforts to provide entry-level 
jobs.
    Since the inception of the SRF, only the initial Federal 
seed money has been subject to Davis-Bacon prevailing wage 
requirements. State money, including the state match, loan 
repayments, interest, and other non-federal funds are not 
subject to these requirements. There is no precedent for 
applying the Davis-Bacon Act to state funds within this 
program.
    For these reasons, we oppose the imposition of Davis-Bacon 
Act prevailing wage requirements on the Clean Water SRF 
Program.

                                   John L. Mica.
                                   John Boozman.
                                   Howard Coble.
                                   Connie Mack.
                                   Bill Shuster.
                                   Jerry Moran.
                                   John J. Duncan, Jr.
                                   Gary Miller.
                                   Vernon J. Ehlers.
                                   Henry E. Brown, Jr.
                                   Mary Fallin.
                                   Robert E. Latta.
                                   Pete Olson.