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 Tar 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 thise 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 section 7(c).

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

Subsection (e) provides for the components of a basic State or interstate 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, 13 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 th amount of 40 percent of the basic grant for each "improved program element achieved. If all five elements are achieved a grant in a amount of 250 percent of the basic grant may be made.

Subsection (k) would authorize the Administrator to make grant not in excess of 10 percent of the funds authorized by section 7, t States and interstate agencies for support of exceptional projec 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 appropri tions for those authorities through fiscal year 1972.

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

contracts.

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

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

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

Subparagraph 8(a) (2) (C) would permit a grant only if the grantee Tade provision for satisfactory operation and maintenance of the treatment works. Adequate provision would have to be made for an

rating and managerial staff of well qualified personnel. A new provision in this subparagraph would require the grantee to have or develop the financial and other capability necessary to satisfy future Baste 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 State plan and is entitled to priority over other eligible projects. In dition, the project would have to be consistent with any planning requirements specified by the Administrator in regulations.

Subparagraph 8(a)(2)(E) would retain the provision of the present Act 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 lating to the requirements for an increased Federal share and the requirements for matching payments by States. Subparagraph & 2F) would provide that the Federal share shall be increased to a maximum of 40 percent if the State agrees to "grant, loan or otherwise finance" 25 percent of the cost. (The required State share is 30 percent in the present Act). The words "to grant, loan or otherwise finance" Wood replace the words "to pay" in the present Act to make it clear that the State matching funds need not be an outright grant but may be in the form of a loan. This subparagraph would also provide that the Federal share shall be increased to 40 percent, regardless of whether there are State matching funds, if the grantee has a user charge system as well as other capability for satisfying future waste treatment needs.

Subparagraph 8(a)(2)(G) would change the provisions of the present Act which provide that the Federal share shall be increased to 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 industri wastes unless the industrial user were required by the grantee to pa back that portion of the project cost attributable to the treatment industrial wastes. The Federal share of such recovered costs would b used by the grantee to operate and maintain its works and for mee 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, specifically an assessment of public benefits and the relation of project costs the public interest. In addition, the Administrator would be require 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 fisc years in closer relationship to the construction needs of the respecti States. Four factors would be employed in distributing constructi grant funds among the States. First, 45 percent of the amoun authorized to be obligated in each fiscal year would be allocated the basis of relative State population; second, up to 20 percent wou be allocated to States which agree to grant, loan or otherwise finan at least 25 percent of all project costs during a given fiscal year; thi up to 25 percent would be allocated to States which have approv projects for which grants have not been made or which have be made in a reduced amount because of lack of Federal funds; a fourth, the remainder would be distributed to meet the most seric water pollution control problems as determined by the Administrat The new allocation formula would give the Administrator a degree flexibility to direct construction grant funds to areas where funds most critically needed and where they can be most effectively us This paragraph would also provide for the reallotment of any su which are not obligated by a State at the end of a fiscal year beca of a lack of certified projects [The Act now calls for reallotment af 18 months.] These funds would be reallotted by the Administrator meet the most serious water pollution control needs in accorda with the fourth factor mentioned above.

Paragraph 8(a)(5) would authorize Federal payments in reimbursement of State or local funds used to pre-finance the Federal share of qualified projects on which construction was initiated after June 30, 1956. but prior to July 1, 1971. Paragraph 8(a) (6) would extend this authorization with respect to projects on which construction is initisted after June 30, 1971, in order to continue to provide some encouragement to localities to initiate projects even though Federal funding is not then available. However, projects commenced after June 30, 1971, would not qualify for reimbursement unless, prior to the initiation of construction, the Administrator makes three findings. He would be required to find (1) that the State in which the project is located has given funding priority in the current fiscal year to projects in more advanced stages of construction; (2) that the project is necessary to achieve compliance with water quality standards; and (3) that 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 absive 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 regard to the adequacy of wages of laborers working on projects funded under subsection 8(a).

Paragraph 8(a) (9) would define certain terms used in subsection 8 a. Subparagraph 8(a) (9) (A) would define "industrial wastes" as waste discharges (other than domestic sewage) from industries identified in the Standard Industrial Classification Manual and other wastes as 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 8 and related sections so as to encourage and assist grantees in developing adequate legal, institutional, managerial and financial capability for meeting foreseeable future waste treatment needs to achieve complance with applicable water quality standards. Future waste treatment needs would include the operation, maintenance, expansion and replacement of treatment works. This would be an important new provision to encourage local self-sufficiency and possibly to reduce the future levels of Federal funding needed for treatment works construction.

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

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