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SECTION-BY-SECTION ANALYSIS OF S. 1012, A BILL TO AMEND SECTION 7 OF THE FEDERAL WATER POLLUTION CONTROL ACT (STATE PROGRAM GRANTS)

Subsection (a) would amend section 7 to increase authorizations for appropriations for purposes of State and interstate water pollution Control programs from the present $10 million to $15 million in fiscal Par 1972, $20 million in fiscal year 1973, $25 million in fiscal year 1974, and $30 million in fiscal year 1975. Not less than $10 million of those sums would be available for the basic State or interstate programs.

Subsection (b) would provide for allotments to the States of sums for purposes of basic State programs. This corresponds to the present tion 7(c).

Subsection (c) would provide for the payment to the States of their alltment for purposes of their basic program. This corresponds to the present section 7(d). Clarification is provided in authorizing the use such funds by a State through participation in an interstate agency. Subsection (d) provides for the allotment and payment of sums to erstate agencies for purposes of basic interstate agency water pollution control programs. This corresponds to the present section

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Subsection (e) provides for the components of a basic State or Eterstate agency basic water pollution control program. These components correspond to those presently recited in section 7(f) of the Act, except that the criteria whereby States determine the priorities for waste treatment facilities projects must be criteria acceptable to the Administrator. The grant program would be changed from a mandatory to a discretionary authority.

Subsection (f) provides for the termination of grant support in the event the plan is inadequately executed or otherwise fails to meet the requirements of section 7. This subsection corresponds to the present section 7(g). It eliminates the public hearing and judicial review now provided in the event of grant termination, and would substitute therefore a conference with the Administrator.

Subsection (g) provides for the determination of the "Federal share" of the grant. This corresponds with the present subsection (h), i and (j).

Subsection (h) provides for grants to States and to interstate agencies to develop an improved water pollution control program consisting of five program components. This grant is in addition to the basic program grant.

Subsection (1) authorizes grant bonuses to States or interstate agencies for the achievement of the following program elements: (1) a mandatory permit system, (2) a sewage treatment facilities program, 3 a program of personnel training, (4) a personnel system, including a merit system for classification and competitive salaries, and (5) a planning capability.

Subsection (j) provides for the payment of bonus grants in t amount of 40 percent of the basic grant for each "improved progra element achieved. If all five elements are achieved a grant in amount of 250 percent of the basic grant may be made.

Subsection (k) would authorize the Administrator to make gran not in excess of 10 percent of the funds authorized by section 7, States and interstate agencies for support of exceptional proje dealing with significant water pollution problems.

Section 2 of the bill would amend section 5 of the Act, relating research and development, by extending authorizations for approp tions for those authorities through fiscal year 1972.

Section 3 of the bill would amend section 6 of the Act, relating to development of technology in the areas of advanced waste tr ment, combined sewers and industrial waste treatment, to pro authority to pursue the development of such technology within Environmental Protection Agency as well as through grants

contracts.

Section 4 of the bill would amend section 23 of the Act to ind American Samoa and the Trust Territory of the Pacific Islands w the definition of "State" for all purposes of the Act. Those would be able to participate in all State programs and activities the Act.

ANALYSIS OF S. 1013, A BILL TO AMEND SECTION 8 OF THE FEDERAL WATER POLLUTION CONTROL ACT

Section 1 of the bill would amend section 8 of the Federal Water Pellation Control Act.

Subsection 8(a) would authorize Federal grants for the construction of treatment works to prevent the discharge of inadequately treated stes and for other purposes. Paragraph 8(a) (1) would retain the visions of the present Act authorizing the Administrator to make rants for treatment works and related reports, plans and specifitions. No change would be made in the existing definition of "treatent works" in section 23 of the Act and no change would be made in eligible to receive grants, which would include States, municiPies, intermunicipal agencies and interstate agencies.

Grant limitations would be listed in paragraph 8(a) (2). There would be some modifications and additions to the grant limitations in the ent Act. Subparagraph 8(a)(2)(A) would prohibit a grant unless ere approved by the State water pollution control agency and by "Administrator. Subparagraph 8(a) (2) (B) would prohibit a grant s the grantee agreed to pay all costs not paid for by Federal and te funds.

bparagraph 8(a) (2) (C) would permit a grant only if the grantee rade provision for satisfactory operation and maintenance of the tment works. Adequate provision would have to be made for an rating and managerial staff of well qualified personnel. A new vision in this subparagraph would require the grantee to have or elop the financial and other capability necessary to satisfy future

ste treatment needs.

Subparagraph 8(a) (2) (D) would retain the provisions of the existing At which prohibit a grant unless the project conforms with a section 7 te plan and is entitled to priority over other eligible projects. In tion, the project would have to be consistent with any planning qurements specified by the Administrator in regulations.

bparagraph 8(a) (2) (E) would retain the provision of the present A which specifies that the basic Federal grant share is 30 percent of The cost of the project.

Modifications would be made in the provisions of the present Act ing to the requirements for an increased Federal share and the irements for matching payments by States. Subparagraph * 2 F) would provide that the Federal share shall be increased to a imam of 40 percent if the State agrees to "grant, loan or otherwise

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25 percent of the cost. (The required State share is 30 percent The present Act). The words "to grant, loan or otherwise finance" *replace the words "to pay" in the present Act to make it clear the State matching funds need not be an outright grant but may the form of a loan. This subparagraph would also provide that the ral share shall be increased to 40 percent, regardless of whether are State matching funds, if the grantee has a user charge system all as other capability for satisfying future waste treatment needs.

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Subparagraph 8(a) (2) (G) would change the provisions of th present Act which provide that the Federal share shall be increased t 50 percent if she State agrees to pay 25 percent of the cost and if en forceable water quality standards have been established. The new provision would increase the Federal share to 55 percent if there ar enforceable water quality standards and either the State agrees t grant, loan or otherwise finance 25 percent of the cost, or the grante has a user charge system as well as other capability for satisfyin future waste treatment needs.

Subparagraph 8(a) (2) (H) would add a new provision to prohibi grants unless the grantee provides assurance that it comply wit regulations to assure the effective and efficient use of funds under th section.

Subparagraph 8(a) (2) (H) would add a new provision designed t make more effective and efficient use of construction grant money and to avoid certain abusive practices and inequities associated wit the treatment of industrial wastes in municipal waste treatmen facilities. Grants would be prohibited for projects treating industrie wastes unless the industrial user were required by the grantee to pa back that portion of the project cost attributable to the treatment o industrial wastes. The Federal share of such recovered costs would b used by the grantee to operate and maintain its works and for meet ing future waste treatment needs.

Paragraph 8(a) (3) identifies the factors which would be considere by the Administrator in approving a grant under subsection 8(a Two factors specified in the present Act would be retained, specificall an assessment of public benefits and the relation of project costs the public interest. In addition, the Administrator would be requir to assess the capability of the grantee to satisfy its own future was treatment needs.

Paragraph 8(a) (4) would provide a new allocation formula permit the optimum distribution of funds over the next three fis years in closer relationship to the construction needs of the respect States. Four factors would be employed in distributing construct grant funds among the States. First, 45 percent of the amou authorized to be obligated in each fiscal year would be allocated the basis of relative State population; second, up to 20 percent wo be allocated to States which agree to grant, loan or otherwise fina at least 25 percent of all project costs during a given fiscal year; th up to 25 percent would be allocated to States which have appro projects for which grants have not been made or which have b made in a reduced amount because of lack of Federal funds; fourth, the remainder would be distributed to meet the most ser water pollution control problems as determined by the Administra The new allocation formula would give the Administrator a degre flexibility to direct construction grant funds to areas where funds most critically needed and where they can be most effectively This paragraph would also provide for the reallotment of any which are not obligated by a State at the end of a fiscal year bec of a lack of certified projects (The Act now calls for reallotment 18 months.] These funds would be reallotted by the Administrat meet the most serious water pollution control needs in accord with the fourth factor mentioned above.

Paragraph 8(a) (5) would authorize Federal payments in reimburseBest of State or local funds used to pre-finance the Federal share of

fed projects on which construction was initiated after June 30, 46. but prior to July 1, 1971. Paragraph 8(a) (6) would extend this authorization with respect to projects on which construction is initied after June 30, 1971, in order to continue to provide some encourment to localities to initiate projects even though Federal funding not then available. However, projects commenced after June 30, 1971, would not qualify for reimbursement unless, prior to the initiatn of construction, the Administrator makes three findings. He wild be required to find (1) that the State in which the project is sted has given funding priority in the current fiscal year to projects more advanced stages of construction; (2) that the project is necary to achieve compliance with water quality standards; and (3) tat construction on the project will be initiated within a reasonable period of time. This approach would give the Administrator some control over the accumulation of reimbursables and thus minimize abusive practices.

Paragraph 8(a) (7) would direct the Administrator to make grant payments through the disbursing facilities of the Department of the Treasury. Such payments would be required to be used exclusively to meet the costs of construction.

Paragraph 8(a)(8) would retain the provisions from the present Act which direct the Administrator to make certain determinations with rard to the adequacy of wages of laborers working on projects fnded under subsection 8(a).

Paragraph 8(a) (9) would define certain terms used in subsection 5. Subparagraph 8(a)(9)(A) would define "industrial wastes" as waste discharges (other than domestic sewage) from industries identifed in the Standard Industrial Classification Manual and other wastes determined by the Administrator. Subparagraph 8(a) (9) (B) would retain the same definition of "construction" as appears in the present Act which includes a range of activities from preliminary planning to the actual installation of the facility and alterations and improvements of the facility.

Subsection 8(b) would direct the Administrator to administer section $ and related sections so as to encourage and assist grantees in develing adequate legal, institutional, managerial and financial capability for meeting foreseeable future waste treatment needs to achieve comLance with applicable water quality standards. Future waste treatent needs would include the operation, maintenance, expansion and replacement of treatment works. This would be an important new rovision to encourage local self-sufficiency and possibly to reduce the ture levels of Federal funding needed for treatment works constraction.

Subsection 8(c) would authorize the appropriation of $2 billion in ach of fiscal years 1972, 1973, and 1974 for the purpose of making grants under this section. Sums appropriated would remain available ar til expended.

Section 2 of the bill would provide that the provisions of the bill take effect on July 1, 1971.

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