Question 6. Subsections (h) and (j) are somewhat confusing. Would you explain in greater detail how these bonus offers would work? Would bonus funds granted to one Nice be subtracted from the overall funds available for allotment to other States?

Answer. The basic grants allotment of not less than $10 million would be apportioned to the States and interstate agencies under regulations developed with their advice. Bonus grants could be made from remaining funds. In accordance with regulations governing the administration of the "bonus" funds, States reting one or more of the various requirements for program element improveent in Section (i) would receive additional funds (not requiring a formula astch) ranging from 40 percent to 250 percent of their basic allocations. The gilations would describe procedures for bonus allocation when eligibility for tus funds by the States having improved programs exceeds appropriations. However, States having qualified may not have their bonuses reduced unless ropriations are reduced or the State's formula allotment for its basic grant is liced by changes in population, financial need, or extent of pollution (or they >> longer are carrying out program elements which meet the eligibility require Tents for the bonus). For example, if funds appropriated permit a State or intertate agency to receive a basic grant of $100,000 under the formula then the State interstate agency could receive a bonus of up to $250,000 by meeting the re5.rements of all five of Section 7(i)'s elements. Having met these requirements, each year from available "bonus funds" (i.e., total appropriations minus basic cracts) this State or interstate agency would continue to receive this amount by nuing to have an improved program as described in the regulations. In later tars, should other States develop improved programs meeting the requirements ascribed in the regulations, they would receive bonuses from the funds available after basic grants and previously qualified bonus amounts had been allotted.

That is, these States' allotments are unaffected by their contributions to intertate agencies; e.g., Pennsylvania contributes to three of the five interstate 12ficies receiving program grants under Section 7 of the Act, as amended: kiaware River Basin Commission, Interstate Commission on Potomac River Basin, and Ohio River Valley Water Sanitation Commission.

Question 7. Subsection 7(k), on page 9, permits use of up to 10 percent of the grants ally for support of water pollution control projects that are exceptional in nature and scope. Would you describe in more detail what is intended and what types of programs would be assisted by this language?

Answer. This section provides for the Administrator's discretionary use of rexpended funds, but in no case in excess of 10 percent of total appropriations in any one year.

Exceptional projects would be those which the Administrator considers to be required to support those States or interstate agencies having significant water polution problems requiring additional financial support to solve the problems ore rapidly than would occur under existing circumstances. These could be mated to affected watersheds or basins, particular industries or groups of in4.stries, State or groups of States. Exceptional projects, in general, would be termined by the circumstances surrounding the problems, the ability of the State or interstate agencies involved to respond, and the availability of funds.

Question 8. Section 6(b), on page 11, permits research and development grants to private agencies, institutions, and individuals. Does this include private, profit-making rorporations? If so, what requirements would there be for public access to patent

Answer. Yes, money can go to private, profit-making corporations. To receive such grants, they must agree to the basic government patent clause which provides that the title to any patentable inventions, formulas, etc. developed under the grant goes to the public.

QUESTIONS AND ANSWERS ON S. 1013

Question 1. Section 8(a)(1) contains references, repeated periodically throughout this bill, to “inadequately treated sewage." Does this mean less than secondary treatment? Is this sufficient phrase, as it does not appear to be referenced to water quality standards or some other specific measurement?

Answer. "Inadequately treated sewage" is affluent that results in a violation of water quality standards or degradation of high water quality. This phrase does not necessarily mean "less than secondary treatment," because better treatment than this is required in some cases.

59-068 0-71-pt. 1- -6

Question 2. That same section, 8(a)(1), also refers to development by the grantee of "institutional arrangements and financial capacity to assume adequate future opera tion, maintenance, expansion, and replacement of such works." What would be the timetable for development of such data?

Answer. After enactment of such legislation, the municipality or granted would be required to provide adequate assurance of its intent to comply with thi (and other) requirements as soon as possible in order to receive the Federa assistance for which it would be eligible. In most cases, these data would b developed during the p'anning and contract award phase of the project. Specifi details concerning required assurances and time to comply would be expressed i regulations and/or guidelines.

Question 3. This bill contains added funds in the allocation formulas for areas wi the "most serious water pollution control problems." Would you define what is mear by the "most serious water pollution control problems"? Does it mean discharges the are a certain percentage in excess of water quality standards? Does it mean discharg into a particularly pristine body of water? Does it mean discharges into waters used f municipal water supplies?

Answer. Proposed regulations for allocation of funds for this purpose we published in the Federal Register on March 26, 1971. These regulations conta the following criteria for determining "severe water pollution control problems "(3) Prior to making any reallotment under subparagraphs (1) and (2) of th paragraph, the Administrator may determine whether any part of the unobligate funds under paragraph (d) of this section should be applied in situations of speci need to meet severe local and basinwide pollution problems in order to promo the purposes of the Act most effectively. In making such determination, t Administrator shall apply the following criteria:

(i) The extent of degradation of water quality;

(ii) The extent of the financial need;

(iii) The extent to which degradation is attributed to untreated or i adequately treated waters of municipalities;

(iv) The extent to which facilities to be constructed will contribute to t enhancement of the environment;

(v) Such other factors as the Administrator considers relevant."

Question 4. Section 8(a)(2)(C)(ii) states that no grant can be made unless applicant has taken measures "to establish or require adequate legal, institution managerial, and financial capability for meeting suitable future needs with resp to peration, maintenance, expansion, and replacement of the treatment works order to meet water quality standards." How can the Administrator be assured making such a judgment, when future financial capability may involve a future bo referendum or another variable?

Answer. Financial capability includes the ability to set in motion adequa procedures for meeting the provisions of this subsection. One form of assura would be the applicants' agreement to initiate bond referenda when needed raise capital funds. Success of such referenda is obviously beyond the realm such assurance.

A stronger assurance would be provided by the existence of a user charge syst coupled with revenue bond financing for which a public referendum is not quired. The intent of the proposed legislation is to foster situations in which u charges would provide for debt service, operation, maintenance, and norn replacements.

Establishment of the wastewater system on such a business-like basis wo provide evidence of fiscal soundness conducive to revenue bond financing.

Question 5. Section 8(a)(2) (F) refers to an area's "financial capability to ass adequate operation," etc. What will you consider to be a jurisdiction's legal framew "to assure adequate operation"? How does this requirement, increasing a communi Federal grant to 40 percent, vary from the Section 8(a) (2) (C)(ii) requirement all grantees assure support for operation, maintenance, and expansion, etc.?

Answer. The jurisdiction's legal framework to assure adequate operation wo include the legal capability to operate a treatment facility, institute a user cha system, and provide for other such necessary measures. The basic differe between 8(a) (2) (F) and 8(a) (2) (C) (ii) is in the requirement that "the grat has a treatment works user charge system" under one of the alternative: 8(a)(2) (F), whereas in 8(a) (2) (C) (ii) the grantee either has or will acquir treatment works user charge system.

Question 6. Section_8(a)(2)(D) appears to enable the Administrator to reject a proposal on the basis of a plant's architectural design and drawings. Is this the intent? If so, why is it necessary?

Answer. This provision is necessary to provide authority to the Administrator EPA to review architectural or technical plans and specifications so as to verify corporation of those necessary to achieve the required degree of treatment. Thus, the impact of this, and other requirements, is to assure the most effective sad economical use of Federal funds in the construction of waste treatment works Question 7. Section 8(a)(2) (H) refers to regulations "to assure the effective and fcent use of funds under this section." What types of regulations does this provision contemplate?

Answer. Such regulations for ensuring the effective and efficient use of funds wald include those designed to ensure cost effective planning, and other such asures to achieve the greatest pollution abatement benefits at the least Federal

Question 8. Section 8(a)(2)(I) concerns the recovery by a municipality of that poron of a project's capital costs "which is allocable to the treatment of such industrial The municipality may then retain the industry's capital investment share if the municipality has established a user charge system. May I set up this hypothetical usion: half of the project's cost is attributed to industry; the State contributes 25 serent toward the project's cost, thus raising the Federal share to 40 percent, a total non-municipal governmental share of 65 percent; the municipality thus puts up to 15 percent of the project's cost but recovers 50 percent of the project's cost from industry; has the municipality receives a net gain of 15 percent of the project's cost. Is that posible under the language? If so, why? If not, would you suggest clarifying language? Answer. Yes, it is possible that a municipality could recover amounts through Ldustrial user charges for costs which were not borne by that municipality, but were covered by Federal and State grant funds. This is dealt with in subsection *a I) of S. 1013 which provides that revenues from industrial user charges, to the ext nt they represent the Federal share allccable to the same costs, either revert to the U.S. Treasury or may be retained by the municipality for purposes f providing adequate treatment throughout the grantee's jurisdiction if it has or • developing the required self-sufficiency to provide for future treatment needs of the community.

Question 9. It is unclear to me why Section 8(a)(3) is necessary in view of the marious requirements of Section 8(a)(2). Would you please clarify the need for 8

Answer. The purpose of Section 8(a) (3) is to provide the Administrator, EPA, the necessary flexibility in administering waste treatment construction grants projects. A project may meet all the requirements of law and regulations_but not be desirable in terms of the public interest, and this section would give EPA the flexibility to reject or modify such projects.

Question 10. The regulation under 8(a)(4) appears to be quite discretionary. How would you determine the division of funds annually among (B), (C), and (D)? Could the Administrator allocate all funds to (A) and (D), allotting no funds at all for Sections (B) and (C)? Is such broad discretion intended? If not, could you suggest rifying language?

Answer. The specific amounts for each of the (B), (C), and (D) categories would be determined by the Administrator in accordance with State and national needs when the full array of waste treatment plant requirements for each fiscal year are obtained and analyzed. It is anticipated that all identified problems among the States on which construction can be instituted through FY 74 will be met with funds made available through FY 74. However, all of the categories, (A), B. C), and (D) will probably have to be utilized to meet the needs. It would be *echnically possible to allocate all funds to only (A) and (D), but as all the categories are necessary for the most effective results, this will not occur. However, discretion is necessary for allocating amounts of funds among the categories to schieve the best balanced program for effective results.

Question 11. In Section 8(a)(4), on page 8, line 21, the bill's language indicates that only projects with a "priority" listing will be financed. Priority, of course, is a miting word. All of a State's eligible projects cannot, by the nature of the English anguage, be classified as priority projects, some must be non-priority projects falling into the category of "other eligible projects" (page 3, line 21). Could you explain the

reason for this limitation passing over "other eligible projects"? Could you tell us some detail what criteria will be used to determine project priority? What are t "special priorities" mentioned on page 9, line 4?

Answer. Under the existing Water Pollution Control Act, a project must certified as being entitled to priority over other eligible projects on the bas of a system for determining priorities which is submitted as a part of the Sta water pollution control plan. There is no change in this requirement and it interpreted to allow the States to establish priorities based on water polluti control and financial need so as to utilize most effectively the Federal funds lotted to that State. When the State's allotment is less than the requests funds, it is necessary to establish priorities for those projects which will be fund The criteria to be used will be established by the State and will be subject to revi by the Administrator. The "Special" priorities mentioned on page 9, line 4, will those developed by the Administrator for distribution of funds designated un 8(a)(4)(D) to meet the most serious water pollution control problems.

QUESTIONS AND ANSWERS ON S. 1014

Question 1. There appears to be a significant semantic difference between Administration's bill, S. 1014, and the Chairman's bill, S. 523. It involves the us the phrases "water quality standards” and “water quality criteria." I am fam with the definitions in S. 523, as they appear to be similar to the words "standa and "criteria", as used in the Clean Air Act. Could you define in some detail "v quality criteria" and "water quality standards" as used in Š. 1014 and compare i definitions to the definitions in S. 523?

Answer. S. 1014, in proposed section 10(a), defines "water quality standa to mean water use designations, water quality criteria, effluent limitations, a plan of implementation and enforcement. Each of the four elements of quality standards is then defined. The term "water quality criteria" is defin mean those physical, chemical, and biological characteristics of water qu which, for a given body of water, are required to permit and protect the identified in the water use designation. In present law, water quality stan consist of water quality criteria and a plan of implementation and enforce but the terms are not precisely defined. S. 523 refers to water quality stan in proposed section 10(a) (1) as including a plan, including compliance sche and effluent requirements. Water quality criteria are to be issued to the for the purpose of standards adoption or revision and made available to the but would not seem to be an element of the standards themselves. Thereaf proposed sections 10 and 11, the plan is treated in different places as an el of the standards and as separate from but related to the standards. Pro section 11(a) refers to "water quality standards, including plans, schedu timetables for compliance.

We believe that the definitions and use of terms in S. 1014, the Adminis bill, are clearer and more precise than those in S. 523, and we recommen inclusion in the legislation as reported. We believe that the intent is the s both bills-that water quality standards are enforceable per se, and that a tion of an effluent limitation or a compliance timetable is a violation standards.

Question 2. Section 10(c)(5) requires water quality standards for matter ported from the United States and discharged into the high seas. Would you enough to discuss water quality standards for the high seas, and how they woul Answer. Water quality standards for waters of the high seas beyond th torial sea of the United States would be established by the Administrator p to proposed section 10(e) (3), which directs him to promulgate regulations forth water quality standards for waters not under State jurisdiction, afte and a public hearing. Because our control of discharges into waters of t seas would be limited to discharges of matter transported from or origin areas over which the United States has sovereignty, two elements of the sta water use designations and water quality criteria, could not be exactly to the high seas. Effluent limitations could be effectively applied to disch matter transported from or originating in areas over which the United St sovereignty. A plan of implementation and enforcement, differing of necess a State plan, could be effectively applied. This authority would be adm in coordination with the Administrator's authority to regulate ocean proposed in the Administration bill, "the Marine Protection Act of 197 1

Question 3. Section 10(d)(3) requires non-degradation of waters. What enforcement procedure is available to the Administrator if the non-degradation policy is violated? Answer. It is the intent of the anti-degradation requirement of proposed section 19d (3) to give a clear statutory base to the anti-degradation policy enunciated be the Secretary of the Interior in 1968. We hold that in present law the antidegradation statement submitted by a State is part of the water quality standards of the State and enforceable as such. S. 1014 would reinforce the anti-degradation principle. Proposed section 10(e) (1) directs that the Administrator approve water qabty standards submitted by a State only if the standards are consistent with ngulations and requirements established under section 10(d). This prerequisite includes their consistency with the Administrator's regulations governing the maintenance of the high quality of waters to which water quality criteria lower than rrent water quality apply on the provision's effective date. If there is uncertainty as to the intent of S. 1014 that the anti-degradation requirement is enforceable, we would be glad to work with the staff to develop precise language.

Question 4. Section 10(d) (4) could be interpreted to relate water quality standards to the availability of practicable treatment or control measures," rather than actual pollution levels in the water. Is this a correct interpretation? If so, does this mean aat water quality standards cannot be set at a level higher than industry says is schnologically practical?

Answer. S. 1014 retains the statement in present law that water quality standards are to protect the public health and welfare, enhance the quality of water, and serve the purposes of the Federal Water Pollution Control Act. The availatility of practicable treatment r control measures necessarily affects the rate progress in attaining water quality objectives. The availability of such measures would be the basis for the minimum acceptable levels of treatment or control to set forth in the Administrator's regulations governing effluent limitations. The determination as to the availability of practicable treatment or control Leasures would not be an industry determination as to what is technologically practicable. Proposed section 10(d)(5) directs the Administrator to develop and publish within six months after enactment and from time to time thereafter recommended pollution control techniques necessary to achieve water quality enteria and effluent limitations, including identification of available technology and data on the effectiveness, cost, and economic feasibility of alternative control Zethods).

Question 5. Page 7, line 3, lists "other sources." What does the phrase "other sources" encompass?

Answer. Proposed section 10(d) (4) directs the Administrator to publish reguIstions governing effluent limitations applicable to existing industrial facilities, Dew industrial facilities, sanitary sewers and sewerage treatment plants, and other sources. "Other sources" would cover but not be limited to storm and combined wwers, sedimentation and erosion, feedlots and other agricultural wastes, mine drainage, and watercraft. Power plants, sometimes listed as a separate source, would be included under industrial facilities.

Question 6. Section_10(d) (8) (B)(i), on lines 14 and 15 of page 8, requires complance as “expeditiously as practicable." In S. 523, compliance is required within a three-year period. Could you define "expeditiously as practicable"? Who will make the determination of expeditiousness? Could "expeditious" cover a five-year period? Do you see any specific problem in the use of a specific deadline, as used in the Clean Air Acti

Answer. The provision of S. 1014 directs that no plan of implementation and enforcement shall be approved unless it provides a phased schedule for compliance with effluent limitations as expeditiously as practicable. We did not propose a -pecific deadline, as in S. 523, because it was our considered judgment that a uniform deadline would not accelerate the national water quality program. We felt that it would bring pressures for extensions in some cases and relaxation of efforts I others. We hope that a five-year period would not be required, and that many, d not most, States will show compliance with effluent limitations within three Fears Experience under the present law points to the importance of the phased compliance schedule. Failure to meet interim dates would constitute a violation tion of water quality standards and a clear basis for enforcement action.

Question 7. Would you please explain the differences in time span in Sections 10(d) B) and 10(d)(8)(B)(ii)? Sentence (i), affecting municipalities and industry, ralis for “a phased schedule for the attainment of compliance." Sentence (ii), affecting