Safe Drinking Water Act: Background and Issues in the 109th Congress

Safe Drinking Water Act:
th
Background and Issues in the 109 Congress
Updated January 10, 2007
Mary Tiemann
Specialist in Environmental Policy
Resources, Science, and Industry Division

Safe Drinking Water Act: Background and Issues
in the 109^th Congress
Summary
In the 109^th Congress, key drinking water issues involved water infrastructure
funding and problems caused by specific contaminants, such as the gasoline additive
methyl tertiary butyl ether (MTBE), perchlorate, and lead in drinking water.
Congress last reauthorized the Safe Drinking Water Act (SDWA) in 1996, and
although funding authority for most SDWA programs expired in FY2003, broad
reauthorization bills were not proposed, as the Environmental Protection Agency
(EPA), states, and water systems remained focused on implementing the
requirements of the 1996 amendments.
One SDWA amendment was enacted in the 109^th Congress. The Energy Policy
Act of 2005, Section 322, amended SDWA to exempt from regulation the
underground injection of any fluid, except diesel fuel, for hydraulic fracturing
purposes related to oil, gas, and geothermal production.
Congress also considered legislation to address concerns about drinking water
contamination by perchlorate, the key ingredient in solid rocket fuel. The House
passed H.R. 18 and H.R. 186 to establish groundwater remediation programs in
California, but no further action occurred on either bill.
In the 109^th Congress, several bills, including a reported bill, S. 2145, proposed
to expand water security requirements for certain high-risk water systems. The
Department of Homeland Security (DHS) FY2007 appropriations act (P.L. 109-295,
H.R. 5441) authorized DHS to regulate high-risk chemical facilities for three years,
but excluded drinking water and wastewater treatment facilities from coverage.
An overarching SDWA issue concerned the cumulative cost and complexity of
drinking water standards and the ability of water systems, especially small systems,
to comply with standards. The issue of the affordability of drinking water standards,
such as the revised arsenic standard, merged with the larger debate over the federal
role in assisting communities with financing drinking water infrastructure.
To help communities finance projects needed to comply with drinking water
standards, Congress authorized a drinking water state revolving fund (DWSRF)
program in 1996. Congress has appropriated roughly $840 million annually for this
program in recent years. Nonetheless, studies show that a large funding gap exists
and is likely to grow as SDWA requirements increase and infrastructure ages. The
Senate Environment and Public Works Committee reported S. 1400, the Water
Infrastructure Financing Act, to authorize increased funding for the DWSRF program
and a parallel wastewater program, and to provide grant assistance for small
communities. Several other bills were introduced to establish a grant program to help
small communities comply with drinking water standards and provide greater
compliance flexibility for small water systems. No further action occurred on these
bills. The debate over the federal role in funding projects needed for SDWA
compliance, and for water infrastructure improvement in general, is likely to
continue.

Contents
In troduction ......................................................1
The 1996 SDWA Amendments...................................2
Regulated Public Water Systems..................................3
Safe Drinking Water Issues..........................................4
Regulating Drinking Water Contaminants...........................4
Standard-Setting ...........................................4
Recent and Pending Rules...................................5
Perchlorate ...............................................6
Lead in Drinking Water.....................................8
Methyl Tertiary Butyl Ether (MTBE)..........................8
Drinking Water Infrastructure Funding............................10
Drinking Water State Revolving Fund........................10
Funding Issues...........................................11
Drinking Water Security.......................................13
Chemical Facility Security..................................15
Small Systems Issues..........................................16
Small System Variances....................................17
Exemptions .............................................17
Affordability Issues and Compliance..........................18
Congressional Hearings, Reports, and Documents.......................19
For Additional Reading............................................20
List of Tables
Table 1. Size Categories of Community Water Systems....................3
Table 2. Community Water System Requirements Under the Bioterrorism
Preparedness Act of 2002......................................14

Safe Drinking Water Act: Background and
th
Issues in the 109 Congress
Introduction
The 109^th Congress considered legislation on a wide range of drinking water
quality issues, and one Safe Drinking Water Act (SDWA) amendment was enacted
during the first session. The Energy Policy Act of 2005 (P.L. 109-58, H.R. 6, Section
322) amended SDWA provisions concerning the protection of underground sources
of drinking water (SDWA §1421(d)). Specifically, the energy law precludes the
Environmental Protection Agency (EPA) from regulating the underground injection
of any fluids, except diesel fuel, for hydraulic fracturing purposes related to oil, gas,
and geothermal production.¹
During the second session, the 109^th Congress addressed drinking water quality
issues primarily through the appropriations process. In May 2006, the House passed
H.R. 5386 (H.Rept. 109-465), the Department of Interior, Environment, and Related
Agencies Appropriations Act for FY2007, which included funding for the EPA. The
House bill provided, as requested, $841.5 million for the drinking water state
revolving fund (DWSRF) program to provide financial assistance to help public
water systems comply with drinking water standards. The Senate-reported version
of H.R. 5386 (S.Rept. 109-275) also contained $841.5 million for the DWSRF
program, $4 million more than FY2006 funding. However, no further action
occurred on the Interior-Environment appropriations bill. Under the continuing
resolution providing appropriations for FY2007 through February, 15, 2007 (P.L.
109-383, H.J.Res. 102), EPA programs have been funded at the FY2006 levels. The
FY2006 funding level for the DWSRF program was $837.5 million.
The Safe Drinking Water Act² is the key federal law for protecting public water
supplies from harmful contaminants. First enacted in 1974 and broadly amended in
1986 and 1996, the act is administered through programs that regulate contaminants
in public water supplies, provide funding for infrastructure projects, protect sources
of drinking water, and promote the capacity of water systems to comply with SDWA
regulations. The 1974 law established the federal-state structure in which states and
tribes may be delegated primary enforcement and implementation authority (primacy)
for the drinking water program by the EPA, which is the federal agency responsible

¹ Responding to a court ruling, the EPA had required the state of Alabama to regulate
underground injection of fluids for hydraulic fracturing purposes (specifically, coalbed
methane production) under its SDWA underground injection program. For more
information, see CRS Report RL32873, Key Environmental Issues in the Energy Policy Act
of 2005 (P.L. 109-58, H.R. 6), coordinated by Brent D. Yacobucci.
² Title XIV of the Public Health Service Act (42 U.S.C. 300f-300j-26).

for administering the law. The state-administered Public Water Supply Supervision
(PWSS) program remains the basic program for regulating public water systems, and
the EPA has delegated primacy for this program to all states, except Wyoming and
the District of Columbia (which SDWA defines as a state); the EPA has
responsibility for implementing the PWSS program in these two jurisdictions.
Congress passed the SDWA in 1974, after a nationwide study of community
water systems revealed widespread water quality problems and health risks resulting
from inadequate facilities, poor operating procedures, and poor management of water
supplies in communities of all sizes. Much progress has been made since then, and
91 drinking water contaminants are now regulated. In 2004, the EPA reported that
the population served by community water systems that met all health-based
standards increased from 83% in 1994 to 91% in 2002.³ Nonetheless, drinking water
safety concerns and challenges remain. The EPA and state enforcement data indicate
that water systems still incur tens of thousands of violations of SDWA requirements
each year. These violations primarily involve monitoring and reporting requirements,
but also include thousands of violations of standards and treatment techniques.
Moreover, monitoring and reporting violations create uncertainty as to whether
systems actually met the applicable health-based standards. Concern also exists over
the potential health effects of contaminants for which standards have not been set,
such as perchlorate and methyl tertiary butyl ether (MTBE), and the act requires the
EPA to continually evaluate unregulated contaminants that may be candidates for
regulation.
The 1996 SDWA Amendments
The 104^th Congress made numerous changes to the act with the SDWA
Amendments of 1996 (P.L. 104-182), culminating a multiyear effort to amend a law
that was widely criticized as having too little flexibility, too many unfunded
mandates, and an arduous but unfocused regulatory schedule. Among the key
provisions, the 1996 amendments authorized a drinking water state revolving loan
fund (DWSRF) program to help public water systems finance projects needed to
comply with SDWA rules. The amendments also established a process for selecting
contaminants for regulation based on health risk and occurrence, gave the EPA some
added flexibility to consider costs and benefits in setting most new standards, and
established schedules for regulating certain contaminants (such as Cryptosporidium,
disinfection byproducts, arsenic, and radon). The law added several provisions
aimed at building the capacity of water systems (especially small systems) to comply
with SDWA regulations; it also imposed many new requirements on the states,
including programs for source water assessment, operator certification and training,
and compliance capacity development. The amendments also required that
community water suppliers provide customers with annual “consumer confidence
reports” that provide information on regulated contaminants found in the local
drinking water. The law authorized appropriations for most SDWA programs

³ U.S. Environmental Protection Agency, Providing Safe Drinking Water in America: 2002
National Public Water Systems Compliance Report, EPA 305-R-04-001, December 2004,

96 p.

through FY2003, and although funding authority generally has expired, broad
reauthorization bills have not been proposed, as the EPA, states, and public water
systems remain focused on implementing and complying with the requirements of
the 1996 amendments.
Regulated Public Water Systems
Federal drinking water regulations apply to some159,000 privately and publicly
owned water systems that provide piped water for human consumption to at least 15
service connections or that regularly serve at least 25 people. (The law does not
apply to private residential wells.) Of these systems, 52,838 are community water
systems (CWSs) that serve a total residential population of roughly 272 million year-
round. All federal regulations apply to these systems. (Roughly 15% of community
systems are investor-owned.) Nearly 18,650 public water systems are non-transient,
non-community water systems (NTNCWSs), such as schools or factories, that have
their own water supply and serve the same people for more than six months but not
year-round. Most drinking water requirements apply to these systems. Another

84,740 systems are transient non-community water systems (TNCWSs) (e.g.,

campgrounds and gas stations) that provide their own water to transitory customers.
TNCWSs generally are required to comply only with regulations for contaminants
that pose immediate health risks (such as microbial contaminants), with the proviso
that systems that use surface water sources must also comply with filtration and
disinfection regulations.
Of the 52,838 community water systems, roughly 84% serve 3,300 or fewer
people. While large in number, these systems provide water to just 9% of the
population served by all community systems. In contrast, 8% of community water
systems serve more than 10,000 people, and they provide water to 81% of the
population served. Fully 85% (16,545) of non-transient, non-community water
systems and 97% (84,740) of transient noncommunity water systems serve 500 or
fewer people. These statistics give some insight into the scope of financial,
technological, and managerial challenges many public water systems face in meeting
a growing number of complex federal drinking water regulations. Table 1 provides
statistics for community water systems.
Table 1. Size Categories of Community Water Systems
^Sys^t^em^sⁱ^ze^Num^b^{er of}^co^m^m^unit^y^P^o^pula^t^ioⁿ^s^erved^{Percentage of}^co^m^m^unit^y^{Percentage of}^po^pula^t^ioⁿ
⁽^p^o^pula^t^io^{n serv}^ed)^w^a^{ter s}^y^s^t^em^s⁽^m^illio^ns)^w^a^{ter s}^y^s^t^em^s^s^erved
^V^e^ry^s^m^al^l^(25-⁵⁰⁰⁾^30,006^4.96^57%^2%
^S^m^al^l^(501-^3,300)^14,212^20.14^27%^7%
^Medi^u^m^(3,301-^10,000)^4,707^27.35^9%^10%
^L^a^rg^{e (10,001-}^100,000)^3,541^99.81^7%^37%
^V^e^ry^l^a^rg^{e (>100,000)}³⁷²^120.25^1%^44%
^T^o^tal^52,838^272.5^100%^100%
^Source:^A^d^{apted f}^r^om^{US En}^vⁱ^ron^m^en^{tal P}^r^otection^A^g^en^cy^,^Fact^oi^ds^{: D}^rⁱⁿ^ki^{ng W}^a^t^e^r^{and G}^r^ound
^W^a^t^e^r^St^atⁱ^s^tⁱ^c^s^f^o^r²⁰⁰⁴^,^a^t^[^h^t^t^p^:^/^/^www.^e^p^a^.^g^o^v^/^s^a^f^e^wa^t^e^r^/^d^a^t^a^/^p^d^f^s^/^d^a^t^a^_^f^a^c^t^oⁱ^d^s^_2004.pdf^].

Safe Drinking Water Issues
Various drinking water issues received attention during the 109^th Congress,
including infrastructure funding needs; the capacity of public water systems,
especially small systems, to comply with SDWA regulations; the security of water
supplies; and contamination of drinking water by specific contaminants, including
lead and unregulated contaminants such as MTBE and perchlorate. Although
appropriations for most SDWA programs were authorized through FY2003, SDWA
reauthorization was not on the agenda in the 109^th Congress. Rather, legislation
addressed specific drinking water issues, such as infrastructure funding and security,
and contamination of water supplies by particular contaminants, such as MTBE and
perchlorate. As with other EPA-administered statutes having expired funding
authority, Congress continued to appropriate funds for SDWA programs.
Regulating Drinking Water Contaminants
Standard-Setting. The Safe Drinking Water Act directs the EPA to
promulgate a National Primary Drinking Water Regulation for a contaminant if the
Administrator determines that (1) it may have adverse health effects, (2) it is likely
to be present in public water systems with a frequency and at levels of public health
concern, and (3) its regulation presents a meaningful opportunity for health risk
reduction. The regulations generally include numerical standards that establish the
highest level of a contaminant that may be present in water supplied by public water
systems. Where it is not economically or technically feasible to measure a
contaminant at very low concentrations, the EPA may establish a treatment technique
in lieu of a standard.
Developing a drinking water regulation is a complex process, and the EPA must
address a variety of technical, scientific, and economic issues. The agency must (1)
determine the extent of occurrence of a contaminant in sources of drinking water; (2)
evaluate the potential human exposure and risks of adverse health effects to the
general population and to sensitive subpopulations; (3) ensure that analytical methods
are available for water systems to use in monitoring for a contaminant; (4) evaluate
the availability and costs of treatment techniques that can be used to remove a
contaminant; and (5) assess the impacts of a regulation on public water systems, the
economy, and public health. Regulation development typically is a multiyear process.
The EPA may expedite procedures and issue interim standards to respond to urgent
threats to public health.
After reviewing health effects studies, the EPA sets a nonenforceable maximum
contaminant level goal (MCLG) at a level at which no known or anticipated adverse
health effects occur and that allows an adequate margin of safety. The EPA also
considers the risk to sensitive subpopulations, such as infants and children. For
carcinogens and microbes, the EPA generally sets the MCLG at zero. Because
MCLGs are based only on health effects and not on analytical detection limits or the
availability or cost of treatment technologies, they may be set at levels that are not
feasible for water systems to meet.

Once the MCLG is established, the EPA then sets an enforceable standard, the
maximum contaminant level (MCL). The MCL generally must be set as close to the
MCLG as is “feasible” using the best technology or other means available, taking
costs into consideration (SDWA §1412(b))⁴. The EPA has relied on legislative
history to determine the meaning of “feasible.” Most recently, the Senate report
accompanying the 1996 amendments stated that “feasible” means the level that can
be reached by large, regional drinking water systems applying best available
treatment technology. The Senate committee explained that this approach is used
because 80% of the population receives its drinking water from large community
water systems, and thus, safe water can be provided to most of the population at very
affordable costs.⁵
However, because standards are based on cost considerations for large systems,
Congress expected that standards could be less affordable for smaller systems. An
issue in the 1996 reauthorization debate concerned whether the costs of some
standards were justified, given their estimated risk-reduction benefits. As amended,
the act now requires the EPA, when proposing a standard, to publish a determination
as to whether or not the benefits of a proposed standard justify the costs. If the EPA
determines that the benefits do not justify the costs, the EPA, in certain cases, may
promulgate a standard that is less stringent than the feasible level and that
“maximizes health risk reduction benefits at a cost that is justified by the benefits.”⁶
Recent and Pending Rules. The EPA’s recent rulemaking activities
include a January 4, 2006, rule package (71 Federal Register 387) that expanded
existing requirements to control pathogens (especially Cryptosporidium) and
disinfectants (e.g., chlorine) and their byproducts (e.g., chloroform). These rules,
along with the Long Term 2 Enhanced Surface Water Treatment Rule (LT2 rule) and
the Stage 2 Disinfectant and Disinfection Byproduct Rule (Stage 2 DBP), complete
a series of statutorily mandated rules that impose increasingly strict controls on the
presences of pathogens and disinfectants and their byproducts in water systems.⁷ On
November 8, 2006, the EPA promulgated the Ground Water Rule (71 Federal
Register 65574), establishing disinfection requirements for systems relying on ground
water. The rule is intended to reduce the risk of exposure to waterborne pathogens

⁴ For a more detailed discussion, see CRS Report RL31243, Safe Drinking Water Act: A
Summary of the Act and Its Major Requirements, by Mary Tiemann.
⁵ SDWA does not discuss how the EPA should consider cost in determining feasibility; thus,
the EPA has relied on legislative history for guidance. Congress most recently expressed
its view on this matter in the Senate report accompanying the 1996 Amendments. The
report states that “[f]easible means the level that can be reached by large regional drinking
water systems applying best available treatment technology.... This approach to standard
setting is used because 80% of the population receives its drinking water from large systems
and safe water can be provided to this portion of the population at very affordable
costs.”(U.S. Senate. Safe Drinking Water Amendments Act of 1995, Report of the Committee
on Environment and Public Works on S. 1316. S.Rept. 104-169. p. 14. Nov. 7, 1995.)
(Approximately 80% of the population is served by community water systems that serve a
population of 10,000 or more.)
⁶ SDWA §1412(b)(6); 42 U.S.C. 300g-1.
⁷ Information on these rules can be found at [http://www.epa.gov/safewater/disinfection].

from fecal contamination. The EPA also promulgated new or revised standards for
several radionuclides, including uranium and radium, and a revised standard for
arsenic. These regulations are expected to reduce an array of health risks for
consumers, but they potentially have significant costs for those communities that
must expand treatment practices and facilities to comply with the standards.
On July 18, 2006, the EPA proposed revisions to the Lead and Copper Rule (71
Federal Register 40828). The proposed changes are intended to address weaknesses
identified during a nationwide review of that rule, following the discovery of high
lead levels in Washington, DC, tap water in 2004.⁸ The agency also has been
developing a final radon rule, which was proposed in 1999, and has been evaluating
numerous contaminants, including perchlorate and MTBE, for possible regulation.
Perchlorate. The key ingredient of solid rocket fuel, perchlorate is used
heavily by the Department of Defense (DOD), the National Aeronautics and Space
Administration (NASA), and related industries. It is also used in road flares,
fireworks, construction explosives, and a variety of other products. This highly
soluble and persistent compound has long been disposed of on the ground without
treatment or controls, and has been detected in sources of drinking water that serve
more than 11 million people, usually at low levels. Perchlorate is known to disrupt
the uptake of iodine in the thyroid, potentially affecting thyroid function. A key
concern is that, if sufficiently severe, impaired thyroid function in pregnant women
can impair brain development in fetuses and infants.
The EPA identified perchlorate as a candidate for regulation in 1998 but
concluded that information was insufficient at that time to make a regulatory
determination. The EPA listed perchlorate as a priority for further research on health
effects and treatment technologies, and for collecting occurrence data. In 2002, the
EPA issued a controversial draft risk assessment for perchlorate that concluded that
potential human health risks of perchlorate exposure include effects on the
developing nervous systems and thyroid tumors. The findings were based on rat
studies that observed benign tumors and adverse effects in fetal brain development.
The draft assessment included a revised draft reference dose (RfD) intended to
protect the most sensitive groups against these effects. That dose roughly translated
to a drinking water standard of 1 part per billion (ppb). The EPA’s 1999 draft level
had translated to a standard of roughly 32 ppb.
Because an RfD provides the basis for determining the level at which a drinking
water standard is set, and because these standards are, in turn, the basis of
environmental cleanup standards, DOD and other perchlorate users and
manufacturers have followed the EPA’s perchlorate risk assessment efforts closely.
Interagency debate over the draft assessment persisted, and in March 2003, the EPA,
the DOD, NASA, and other federal agencies asked the National Research Council
(NRC) to review the science for perchlorate and the EPA’s draft risk assessment.

⁸ The proposed rule and further information on the Lead and Copper Rule and the EPA’s
review of the rule are available at [http://www.epa.gov/safewater/lcrmr/index.html].

The NRC released its study in January 2005.⁹ The NRC committee broadly
agreed with several of the EPA’s findings; however, the committee suggested several
changes to the draft risk assessment. Among other findings, the committee noted
that, unlike rats, humans have multiple mechanisms to compensate for iodide
deficiency and thyroid disorders, and that studies of rats are of limited use for
assessing human health risk associated with perchlorate exposure. The committee
recommended that the EPA base its assessment on human data. The NRC calculated
an RfD for perchlorate that incorporates an uncertainty factor to protect the most
sensitive populations. This RfD would translate to a drinking water equivalent level
of 24.5 ppb. (If the EPA were to develop an MCL, the agency would likely lower
this number to reflect the amount of perchlorate exposure that the EPA determines
comes from other sources, especially food.) The EPA has adopted the NRC’s
recommended RfD but has not decided whether to set a standard for perchlorate.
Despite the NRC recommendations, substantial disagreement has persisted
regarding what level of exposure is safe, especially for fetuses and infants, and what
drinking water standard is appropriate. Massachusetts has established a drinking
water standard for perchlorate of 2 ppb, and California has proposed a standard of 6
ppb.¹⁰
An array of perchlorate bills were offered in the 109^th Congress. Many focused
on California, where most perchlorate contamination has been detected. The House
passed two bills to address perchlorate-contaminated groundwater in California: H.R.
186 authorizes the Secretary of the Interior to make grants to the Santa Clara Valley
Water District for groundwater remediation projects, and H.R. 18 authorizes grants
for local water authorities within the Santa Anna River watershed. The Senate did
not act on either bill. Similar legislation, H.R. 3053, was introduced to authorize the
restoration of perchlorate-contaminated groundwater in the Eastern Santa Clara River
Basin. H.R. 4798 and S. 2298 proposed to establish a California Perchlorate Cleanup
Fund to provide grants for remediating perchlorate-contaminated drinking water
sources and supplies and to authorize grants for developing perchlorate cleanup
technologies; these companion bills expressed the sense of the Congress that the EPA
should establish a drinking water standard for perchlorate. H.R. 213 would have
required the EPA to set a drinking water standard for perchlorate by July 31, 2007.
Congress did not complete action on any of these bills.
The 109^th Congress targeted some funding for perchlorate cleanup in conference
reports for various appropriations acts, including DOD and EPA appropriations acts
for FY2006 (P.L. 109-148 and P.L. 109-54, respectively). In the conference report
for the Department of Health and Human Services FY2006 appropriations act (P.L.
109-149), conferees encouraged the National Institute for Environmental Health
Sciences to support studies on the long-term health effects of perchlorate. The
conference report for the FDA’s FY2006 funding act (P.L. 109-97) directed the FDA

⁹ National Research Council, Health Implications of Perchlorate Ingestion, Board on
Environmental Studies and Toxicology, National Academies Press, January 2005, 177 p.
¹⁰ For further discussion, see CRS Report RS21961, Perchlorate Contamination of Drinking
Water: Regulatory Issues and Legislative Actions, by Mary Tiemann.

to continue conducting perchlorate surveys of food and bottled water and to report
back to Congress.
Lead in Drinking Water. Lead from various sources (including paint in older
homes, soil, and water) has posed one of the main environmental threats to children’s
health. The EPA has long regulated lead in drinking water, and last revised the
regulation for lead in 1991. In early 2004, the issue of lead contamination reemerged
after water monitoring revealed high amounts of lead in tap water in Washington,
DC. In response to this event, the EPA undertook a national review of lead
monitoring by water systems to determine whether the problem in the District was
widespread. In October 2004, the EPA announced that the national data from 73,000
water utilities indicated that lead in drinking water was not a widespread problem.
However, the EPA also assessed national compliance with the lead rule and
began reviewing the rule to determine whether major changes were needed.
Elements of the rule that received most scrutiny included the public notification,
monitoring, and lead service line replacement requirements. The EPA found
monitoring and public notification deficiencies in the rule and, in late 2004, issued
a guidance memo to clarify sampling requirements for public water systems. The
EPA also revised its 1994 guidance on testing for lead in school drinking water. In
March 2005, the EPA initiated a Drinking Water Lead Reduction Plan, based on its
review of the lead rule. Under the plan, the EPA outlined a proposal to tighten and
clarify monitoring and public notification requirements, and to revise treatment and
lead service line replacement requirements. On July 18, 2006, the EPA formally¹¹
proposed changes to the rule (71 Federal Register 40828).
The 108^th Congress held a flurry of oversight hearings examining lead in
drinking water issues, including nationwide enforcement of, and compliance with,
the lead rule, and the overall effectiveness of the regulation in reducing exposures to
lead. In the 109^th Congress, several bills were offered while the EPA pursued its lead
reduction plan and regulatory review activities. Companion bills H.R. 3178 and S.
1328, similar to bills in the 108^th Congress, were introduced to require the EPA to
revise the lead rule and issue regulations for remediating lead in school drinking
water, and to reduce the amount of lead permitted in plumbing. S. 1400, as reported,
would have required a study of lead in plumbing and authorized funding for lead
service line replacement in the District of Columbia. No further action occurred on
these bills.
Methyl Tertiary Butyl Ether (MTBE). This gasoline additive was widely
used to meet the 1990 Clean Air Act (CAA) requirement that reformulated gasoline
(RFG) contain at least 2% oxygen to improve combustion.¹² However, numerous
incidents of water contamination by MTBE prompted calls for restrictions on
MTBE’s use. At least 25 states, including California and New York, have enacted

¹¹ The proposed changes to the Lead and Copper Rule and related information can be
accessed online at [http://www.epa.gov/safewater/lcrmr/index.html].
¹² The Clean Air Act requires RFG to be used in areas that fail to meet the federal ozone
standard and are classified as “severe” or “extreme” nonattainment.

limits or phase-outs of the additive. Although the EPA has not developed a drinking
water standard for MTBE, at least seven states have set their own MTBE standard.
The primary source of MTBE in drinking water has been petroleum releases
from leaking underground storage tank (UST) systems. Once released, MTBE moves
through soil and into water more rapidly than other gasoline components, thus
making it more likely to reach drinking water sources. The EPA estimates that UST
leaks involving MTBE can be two to four times more costly to clean up than
conventional gasoline leaks, which generally cost from $100,000 to $125,000 to
remediate.
Because of data gaps, the EPA has not issued a health advisory or drinking
water standard for MTBE; however, the EPA’s Office of Research and Development
concluded in 1993 that the inhalation evidence would support classifying MTBE as
a “possible human carcinogen.”¹³ In 1997, the EPA issued a drinking water advisory
for MTBE based on consumer acceptability (for taste and smell), because even small
amounts of MTBE can render water undrinkable because of its strong taste and odor.
Advisories provide information on contaminants that are not regulated under SDWA.
They are not enforceable, but provide guidance to water suppliers and others
regarding potential health effects or consumer acceptability. Although the MTBE
advisory is not based on health effects, the EPA stated at that time that keeping
MTBE levels in the range of 20-40 parts per billion or lower for consumer
acceptability reasons would also provide a large margin of safety from potential
adverse health effects.
The EPA has taken steps that could lead to the issuance of a drinking water
standard for MTBE. In 1998, the EPA included MTBE on a list of contaminants that
are potential candidates for regulation. Compounds on the contaminant candidate list
are categorized as regulatory determination priorities, research priorities, or
occurrence priorities. The EPA placed MTBE in the category of contaminants for
which further occurrence data collection and health effects research are priorities.
Thus, although the EPA did not select MTBE for regulation, the agency planned to
pursue research to fill data gaps so that a regulatory determination may be made.
However, most current MTBE research is focused on inhalation risks, and very little
research is being done specifically to assess the risks of exposure to MTBE via
drinking water.
The 109^th Congress responded to MTBE contamination concerns in the Energy
Policy Act of 2005 (P.L. 109-58, H.R. 6). The energy act did not ban MTBE, but it
removed the Clean Air Act requirement that reformulated gasoline contain
oxygenates, which had prompted greater use of MTBE. A Senate provision
authorizing the EPA to regulate the sale a motor fuel or additive if it caused water
pollution also was dropped in conference. Title XV, Subtitle B, of P.L. 109-58

¹³ U.S. Environmental Protection Agency, Health Risk Perspectives on Fuel Oxygenates,
Office of Research and Development, the EPA 600/R-94/217, 1994, p. 8. See also
Assessment of Potential Health Risks of Gasoline Oxygenated with Methyl Tertiary Butyl
Ether (MTBE), the EPA/600/R-93/206, 1993, [http://www.epa.gov/ncea/pdfs/mtbe/
gasmtbe.pdf].

comprised the “Underground Storage Tank Compliance Act,” which added new leak
prevention and enforcement provisions to the federal UST regulatory program.¹⁴
Of major concern to drinking water suppliers was a provision in the House
version of H.R. 6 that would have provided a retroactive “safe harbor” to prohibit
products liability lawsuits, alleging manufacturing or design defects, against
producers of fuels containing MTBE and renewable fuels. The provision would not
have affected other liability (such as liability for cleanup costs or negligence for
spills). With liability ruled out for design defects, manufacturing defects, and failure
to warn of hazardous products, MTBE manufacturers would likely be more difficult
to reach under these other bases of liability.¹⁵ The safe harbor provision was opposed
by many states, local government organizations, and water suppliers. Opponents
argued that a products liability shield would effectively leave gas station owners
liable for cleanup, and because these businesses often have few resources, the burden
for cleanup would fall to communities, water systems, the states, and private well
owners. Proponents argued that a liability safe harbor was merited, given that MTBE
has been used to meet federal Clean Air Act mandates, and that the key problem was
leaking tanks, not MTBE. The Senate bill included a safe harbor for renewable fuels
but not MTBE, and it was not retroactive. Unable to work out a broadly acceptable
compromise, conferees dropped the safe harbor provision from the legislation.
Although the MTBE ban also was dropped from the legislation, the use of MTBE is
expected to decline as the act did repeal the oxygenate requirement, which became
effective nationwide in May 2006.
Drinking Water Infrastructure Funding
Drinking Water State Revolving Fund. A persistent SDWA issue has
concerned the ability of public water systems to upgrade or replace infrastructure to
comply with federal drinking water regulations and, more broadly, to ensure the
provision of a safe and reliable water supply. In the 1996 SDWA Amendments,
Congress responded to growing complaints about the act’s unfunded mandates and
authorized a drinking water state revolving loan fund (DWSRF) program to help
water systems finance infrastructure projects needed to meet drinking water standards
and address the most serious health risks. The program authorizes the EPA to award
annual capitalization grants to states. States then use their grants (plus a 20% state
match) to provide loans and other assistance to public water systems. Communities
repay loans into the fund, thus making resources available for projects in other
communities. Eligible projects include installation and replacement of treatment
facilities, distribution systems, and certain storage facilities. Projects to replace aging
infrastructure are eligible if they are needed to maintain compliance or to further
public health protection goals.

¹⁴ For details, see CRS Report RL32865, Renewable Fuels and MTBE: A Comparison of
Selected Provisions in the Energy Policy Act of 2005 (H.R. 6), by Brent D. Yacobucci et al.,
and CRS Report RS21201, Leaking Underground Storage Tanks: Program Status and
Issues, by Mary Tiemann.
¹⁵ For a discussion of legal issues, see CRS Report RS21676, The Safe Harbor Provision for
Methyl Tertiary Butyl Ether (MTBE), by Aaron M. Flynn.

Authorizations of appropriations for the DWSRF program totaled $9.6 billion,
including $1 billion for each of FY1995 through FY2003. Through FY2006,
Congress provided nearly $8.6 billion for this program, including $837.5 million for
FY2006 (after applying two rescissions of 0.474% and 1%). For FY2007, the
President requested $841.5 million for this program, and the House and the Senate
Committee on Appropriations each have approved this amount in H.R. 5386, the
Interior-Environment appropriation bill. However, no further action occurred on this
bill. The continuing resolution providing appropriations for FY2007 through
February, 15, 2007 (P.L. 109-383, H.J.Res. 102), funded the DWSRF program at the
FY2006 level.
Through June 2005, the EPA had awarded $6.56 billion in capitalization grants,
which, when combined with the state match, bond proceeds, and other funds,
amounted to $12.4 billion in DWSRF funds available for loans and other assistance.
Also through June 2005, 7,912 projects received assistance, and total assistance
provided by the program reached $9.44 billion.¹⁶
Funding Issues. The DWSRF program is well regarded, but many
organizations and state and local officials argue that greater investment in water
infrastructure is needed. The EPA’s 2003 drinking water infrastructure needs survey
concluded that systems need to invest $276.8 billion in infrastructure improvements
over 20 years to comply with drinking water regulations and to ensure the provision¹⁷
of safe water. The survey includes funds needed for compliance with several recent
rules (including the arsenic rule and the disinfectants and disinfection byproducts
rules) and several proposed rules (e.g., radon). The survey also identified $1 billion
in security-related needs. All infrastructure projects in the needs assessment promote
the health objectives of the act, but only $45.1 billion (16.3%) of the total need is
attributable to SDWA compliance. Of this amount, $35.2 billion is needed to address
existing regulations, and $30.2 billion (86%) is needed for projects to address
microbiological contamination. Nearly two-thirds of the need ($183.6 billion) is for
transmission and distribution projects. Although aging, deteriorated infrastructure
often poses a threat to drinking water safety, these needs are largely unrelated to
federal mandates.
A related issue is the need for communities to address infrastructure costs that
are outside the scope of the DWSRF program and generally ineligible for such
assistance. Ineligible categories include future growth, ongoing rehabilitation, and
system operation and maintenance. Often, these basic infrastructure costs far exceed
SDWA compliance costs.
In 2002, the EPA issued its municipal wastewater and drinking water
infrastructure funding gap analysis, which identified potential funding gaps between

¹⁶ See also CRS Report RS22037, Drinking Water State Revolving Fund: Program Overview
and Issues, by Mary Tiemann.
¹⁷ U.S. Environmental Protection Agency, Drinking Water Infrastructure Needs Survey and
Assessment: Third Report to Congress, June 2005, EPA 816-R-05-001, available at
[ ht t p: / / www.epa.gov/ saf e wat e r / needssur vey/ i ndex.ht ml ] .

projected needs and spending from 2000 through 2019.¹⁸ This analysis estimated the
potential 20-year funding gap for drinking water and wastewater infrastructure capital
and operations and maintenance (O&M), based on two scenarios: a “no revenue
growth” scenario and a “revenue growth” scenario that assumed spending on
infrastructure would increase 3% per year. Under the “no revenue growth” scenario,
the EPA projected a funding gap for drinking water capital investment of $102
billion (roughly $5 billion per year) and an O&M funding gap of $161 billion ($8
billion per year). Using revenue growth assumptions, the EPA estimated a 20-year
capital funding gap of $45 billion ($2 billion per year), and no gap for O&M. In
response to the Gap Analysis, the EPA’s FY2004 budget request proposed that
funding for the DWSRF program be continued at a level of $850 million annually
through FY2018. The EPA’s budget justification explained that this funding level
would allow DWSRFs to revolve at a cumulative level of $1.2 billion (more than
double the previous goal of $500 million) and would help close the funding gap for
drinking water infrastructure needs.
Other assessments also have revealed a funding gap. In 2000, the Water
Infrastructure Network (WIN) (a coalition of state and local officials, water
providers, environmental groups and others) reported that over the next 20 years,
water and wastewater systems need to invest $23 billion annually more than current
investments to meet SDWA and Clean Water Act health and environmental priorities
and to replace aging infrastructure. WIN and other groups have proposed
multibillion dollar investment programs for water infrastructure. Others, however,
have called for more financial self-reliance within the water sector.
Water infrastructure funding issues received attention in the 109^th Congress.
The Senate Environment and Public Works Committee reported S. 1400, the Water
Infrastructure Financing Act (S. Rept 109-186). This bill would have amended the
SDWA and the Clean Water Act to reauthorize both SRF programs (authorizing $15
billion over five years for the DWSRF). The bill also would have directed the EPA
to establish grant programs for small or economically disadvantaged communities for
critical drinking water and water quality projects; authorized loans to small systems
for preconstruction, short-term, and small project costs; and directed the EPA to
establish a demonstration program to promote new technologies and approaches to
water quality and water supply management. At markup, the committee adopted an
amendment to apply Davis-Bacon prevailing wage requirements, in perpetuity, to
projects receiving DWSRF assistance. Action on similar legislation in the 108^th
Congress was stalled largely by such an amendment. The Davis-Bacon measure
remained contentious, and S. 1400 received no further action.
In the face of uncertainty over increased federal assistance for water
infrastructure, the EPA, states, communities, and utilities have been examining
alternative management and financing strategies to address SDWA compliance costs
and broader infrastructure maintenance and repair costs. Such strategies include
establishing public-private partnerships (privatization options range from contracting

¹⁸ U.S. Environmental Protection Agency, The Clean Water and Drinking Water
Infrastructure Gap Analysis Report, Report No. EPA 816-R-02-020, September 2002, 50
p.

for services to selling system assets), improving asset management, and adopting
full-cost pricing for water services. Still, these strategies may be of limited use to
many small and economically disadvantaged communities, and stakeholders are
likely to continue to urge Congress to increase funding for water infrastructure.¹⁹
Drinking Water Security
Congress addressed several drinking water security issues in the Bioterrorism
Preparedness Act of 2002 (P.L. 107-188, H.Rept. 107-481), which amended SDWA
to require community water systems to conduct vulnerability assessments and prepare
emergency response plans (new SDWA section 1433). The act also added sections
1434 and 1435, directing the EPA to review methods by which terrorists or others
could disrupt the provision of safe water supplies and to review methods for
preventing, detecting, and responding to disruptions. Introduced in July 2005, S.
1426 proposed to reauthorize appropriations for sections 1434 and 1435 and require
the EPA to report to Congress on progress and problems with their implementation.
However, no further action occurred on this legislation.
A key provision of the Bioterrorism Preparedness Act required each community
water system serving more than 3,300 individuals to assess their vulnerability to
terrorist attacks and other intentional acts to disrupt the provision of a safe and
reliable water supply. Combined, these systems serve more than 90% of the
population served by community water systems. The law required these systems to
certify to the EPA that they conducted a vulnerability assessment and to provide the
EPA with a copy of the assessment. The law also required the systems to prepare or
revise emergency response plans incorporating the results of the assessments no later
than six months after completing them. Table 2 outlines the deadlines by which
utilities had to submit their assessments to the EPA and complete emergency
response plans.
The Bioterrorism Act authorized $160 million for FY2002, and sums as may be
needed for FY2003 through FY2005 to provide financial assistance to community
water systems to assess vulnerabilities, prepare response plans, and address security
enhancements and significant threats. The emergency supplemental appropriations
for FY2002 (P.L. 107-117) provided $90 million for assessing the vulnerabilities of
drinking water utilities and security planning, and $5 million for state grants for
assessing drinking water safety. In FY2002, the EPA awarded roughly $53 million
in grants to help the largest systems complete vulnerability assessments by the March

31, 2003, deadline. Essentially all systems met that deadline.

¹⁹ For further discussion of infrastructure issues, see CRS Report RL31116, Water
Infrastructure Needs and Investment: Review and Analysis of Key Issues, by Claudia
Copeland and Mary Tiemann.

Table 2. Community Water System Requirements Under the
Bioterrorism Preparedness Act of 2002
^Sy^st^em^{size by}^po^pula^t^ioⁿ^Vulnera^bilit^y^a^ssessm^ent^s^E^m^{ergency res}^pons^{e plans}
⁽^a^ppr^o^x^.^no^.^o^f^sy^st^e^m^s)^{due da}^t^e^s^{due da}^t^e^s
^{100,000 or m}^o^{re (425)}^March^{31, 2003}^S^e^pt^em^{ber 30, 2003}
^{50,000 -}^{99,999 (460)}^Decem^{ber 31, 2003}^Juⁿ^e^{30, 2004}
^{3,301 -}^{49,999 (7,500)}^Juⁿ^e^{30, 2004}^Decem^{ber 31, 2004}
Federal grants were not available for smaller systems covered by the
Bioterrorism Act’s requirements. Instead, the EPA, states, and water organizations
have provided vulnerability assessment tools, guidance documents, training, and
technical assistance to support security enhancement efforts among these systems.
Similar assistance also has been provided for the remaining 84% of community water
systems that serve 3,300 or fewer and were not required to do vulnerability
assessments and emergency planning.
For FY2003, the EPA requested $16.9 million for vulnerability assessments for
small and medium-sized systems and $5 million for state water security coordinators
to work with the EPA and utilities in assessing water security. P.L. 108-7 included
this amount, plus $2 million for the National Rural Water Association to help small
systems with vulnerability assessments, and $1 million to the American Water Works
Association to provide security training.
For FY2004, the EPA requested and received $32.4 million for critical water
infrastructure protection, including $5 million for state water security coordination
grants. This funding supported states’ efforts to work with water and wastewater
systems to develop and enhance emergency operations plans; conduct training in the
implementation of remedial plans in small systems; and develop detection,
monitoring, and treatment technology to enhance water security. The EPA used
funds to assist the nearly 8,000 community water systems that serve water to
populations between 3,300 and 100,000 and are subject to the Bioterrorism Act.
For FY2005, the EPA requested $5 million for state water security grants and
$6.1 million for other critical infrastructure protection efforts (including $2 million
for the Water Information Sharing and Analysis Center, which shares sensitive
security information with water systems). The EPA noted that the $21.3 million
reduction reflected a shift in priorities from assistance for vulnerability assessments.
In P.L. 108-447, Congress provided the requested amount.
The President requested $5 million for state water security grants for FY2006.
The request also included $44 million for the Water Sentinel Program. The EPA
proposed this water security initiative in response to its water security responsibilities
under Homeland Security Presidential Directive (HSPD) 7. Consistent with the
Bioterrorism Act, HSPD 7 designates the EPA as the lead agency for water
infrastructure security. The goal of the Water Sentinel initiative is to establish pilot
early warning systems in several cities through water monitoring and surveillance for

chemical and biological contaminants, and to build the analytical capacity to support
the surveillance program. For this initiative, the EPA’s FY2006 appropriations act
(P.L. 109-54) included $8.1 million, after rescissions. In H.Rept. 109-80, the House
Appropriations Committee urged the EPA to develop clear goals for the Water
Sentinel program and justify the request more clearly for FY2007. Congress also
provided $5 million ($4.93 after rescissions) for state water security grants.
The FY2007 budget request included $4.95 million for state water security
grants. The request again included a significant amount, $41.7 million, for the Water
Sentinel Program ($33.6 million more than Congress provided for FY2006). The
EPA continued to argue that this program is an essential component of its water
security activities, noting that its purpose is to demonstrate an effective
contamination warning system that could be adopted by drinking water utilities of
various sizes.²⁰ The EPA FY2007 funding bill, H.R. 5386, as passed by the House,
would have provided $16.7 million, or $25 million less than requested for the Water
Sentinel Program. The Senate committee would provide $18.13 million, which was
$23.6 million less than requested, but $10 million above the FY2006 enacted level.
The continuing resolution providing appropriations for FY2007 through February,
15, 2007 (P.L. 109-383, H.J.Res. 102), generally provided funding for EPA activities
at the FY2006 level.
Chemical Facility Security. The issue that received most attention during^th
the 109 Congress concerned the security of chemical facilities located where a
terrorist attack could cause harm to nearby populations. While the Bioterrorism
Preparedness Act required community water systems to conduct vulnerability
assessment and prepare emergency response plans, it did not require systems to make
security upgrades to address any identified vulnerabilities. A key concern has been
the onsite storage of hazardous, gaseous chemicals (such as chlorine) that pose
potential risks to local communities if released. S. 2855 would have amended
SDWA to require community water systems to replace hazardous, gaseous chemicals
with inherently safer technologies (e.g., switching from the use of chlorine gas to
liquid chlorine). S. 2855 also would have required the EPA Administrator to provide
grants to high-consequence facilities for use in paying capital expenditures needed
to make the transition to the use of inherently safe technologies (IST). Both S. 1995
and S. 2781 would have amended the Clean Water Act to address security at
wastewater treatment facilities. S. 2781 (S.Rept. 109-345) did not contain IST
requirements.
Broader chemical facility security bills also were offered in the 109^th Congress
that had implications for water utilities. These bills generally would have authorized
the Secretary of the Department of Homeland Security (DHS) to regulate chemical
facilities that pose certain risks, including certain water treatment plants. S. 2145,
as reported by the Senate Homeland Security and Governmental Affairs Committee,
(S.Rept. 109-332) and its companion bill, H.R. 4999, would have directed the
Secretary of DHS to issue rules designating chemical facilities subject to regulation,
and to establish security performance standards that regulated facilities must meet.

²⁰ See also CRS Report RL31294, Safeguarding the Nation’s Drinking Water: The EPA and
Congressional Actions, by Mary Tiemann.

Facilities would be required to submit to DHS vulnerability assessments, security
plans, and emergency response plans for terrorist incidents. H.R. 5695 (H.Rept. 109-
707) shared several similarities with S. 2145 but would have exempted water
facilities covered by the legislation from redundant requirements (such as conducting
vulnerability assessments), unless DHS determined that more stringent security
requirements were needed. S. 2486 proposed to cover a wider range of facilities and
established a general duty to ensure that facilities are designed, operated, and
maintained in safe manner; the bill defined this obligation to include use of
inherently safer technology to the maximum extent practicable. H.R. 1562 would
have required consultation between DHS and the EPA, and focused on stronger
security and emergency planning measures, rather than requiring changes in
technology. H.R. 2237 would have expanded the EPA’s existing authority to oversee
chemical facilities but would require consultation with DHS.
Several water and local government organizations, including the American
Water Works Association (AWWA), sought exemptions from S. 2145 and other bills
that proposed to give DHS authority to regulate water utilities that use hazardous
chemicals (such as chlorine gas). These stakeholders argued that the EPA already has
an established water security program and has been designated the lead agency for
water infrastructure security. In addition, the AWWA generally has opposed
legislation that would require water utilities to switch treatment processes, without
considering specific utility circumstances and local water and climate characteristics.
Others have argued that mandating the adoption of safer technologies is warranted
because of the potential risk that hazardous chemicals, and particularly gaseous
chlorine, may pose to communities.²¹
The 109^th Congress included a chemical facility security provision in the DHS
FY2007 appropriations bill (P.L. 109-295, H.R. 5441). The provision authorized
DHS to regulate, for three years, high-risk chemical facilities, excluding drinking
water and wastewater treatment facilities and facilities in ports. The DHS is required
to establish risk-based security performance standards for covered facilities and to
require designated chemical facilities to prepare vulnerability assessments and facility
security plans.
Small Systems Issues
A key SDWA issue has involved the financial, technical, and managerial
capacity of small systems to comply with SDWA regulations. Some 84% (44,000)
of the nation’s 52,800 community water systems are small, serving 3,300 persons or
fewer, and 57% (30,000) of the systems serve 500 persons or fewer. Many small
systems face challenges in complying with SDWA rules and, more fundamentally,
in ensuring the quality of water supplies. Major problems include deteriorated
infrastructure, lack of access to capital, limited customer and rate base, inadequate
rates, diseconomies of scale, and limited managerial and technical capabilities.
Although these systems serve just 9% of the population served by community water
systems, the sheer number of small systems has created challenges for policymakers.

²¹ For a detailed discussion of issues and legislation, see CRS Report RL31530, Chemical
Facility Security, by Linda-Jo Schierow.

In the earliest SDWA debates, Congress recognized that setting standards based
on technologies affordable for large cities could pose problems for small systems.
During the reauthorization debate leading up to the 1996 amendments, policymakers
gave considerable attention to the question of how to help small systems improve
their capacity to ensure consistent compliance with the SDWA. The 1996
amendments added provisions aimed at achieving this goal, including a requirement
that states establish strategies to help systems develop and maintain the technical,
financial, and managerial capacity to meet SDWA regulations. Congress also revised
provisions on standard-setting (§1412(b)), variances (§1415(e)), and exemptions
(§1416) to increase consideration of small system concerns.
Small System Variances. Since 1996, the SDWA has required the EPA,
when issuing a regulation, to identify technologies that meet the standard and that are
affordable for systems that serve populations of 10,000 or fewer. If the EPA does not
identify “compliance” technologies that are affordable for these systems, then the
EPA must identify small system “variance” technologies. A variance technology
need not meet the standard, but must protect public health. States may grant
variances to systems serving 3,300 persons or fewer if a system cannot afford to
comply with a rule (through treatment, an alternative source of water, or other
restructuring) and if the system installs a variance technology. With EPA approval,
states also may grant variances to systems serving between 3,300 and 10,000 people.
The EPA has determined that affordable compliance technologies are available
for all drinking water regulations promulgated thus far. Consequently, the agency
has not identified any small system variance technologies, and no small system
variances have been available. However, several recent rules (such as the arsenic and
radium rules and the Stage 2 Disinfectants and Disinfection Byproducts Rule (DBP)
have caused growing concern that the EPA is not using the tools Congress provided
in the 1996 amendments to help small systems comply with SDWA regulations. As
discussed below, the EPA currently is reevaluating its affordability criteria. Based
on this reevaluation, the EPA may authorize states to grant small system variances
for the Stage 2 DBP, which the EPA published in January 2006.
Exemptions. The act’s exemption provisions also are intended to provide
compliance flexibility in certain cases. States or the EPA may grant temporary
exemptions from a standard if, due to certain compelling factors (including cost), a
system cannot comply on time. For example, all systems are required to comply with
the new arsenic standard five years after its promulgation date. An exemption would
allow three more years for qualified systems. Small systems (serving 3,300 persons
or fewer) may be eligible for up to three additional 2-year extensions, for a total
exemption duration of 9 years (and for a total of up to 14 years to achieve
compliance). In the preamble to the arsenic rule published in January 2001,the EPA
noted that exemptions will be an important tool to help states address the number of
systems needing financial assistance to comply with this rule and other SDWA rules
(66 Federal Register 6988). However, because of the administrative burden to the
state, the exemption authority may not be widely used. Through 2004, 13 states had
indicated that they would use the exemptions process for the arsenic rule. However,
because the exemption process is resource-intensive for states, it is unclear whether
states will use this authority with much frequency.

Affordability Issues and Compliance. Prompted by intense debate over
the revised arsenic standard and its potential cost to small communities, the
conference report for the EPA’s FY2002 appropriations (H.Rept. 107-272) directed
the EPA to review its affordability criteria and how small system variance and
exemption programs should be implemented for arsenic. Congress directed the EPA
to report on its affordability criteria, administrative actions, potential funding
mechanisms for small system compliance, and possible legislative actions.
EPA’s 2002 report to Congress, Small Systems Arsenic Implementation Issues,
summarized actions the EPA was undertaking to address these directives. Major
activities included (1) reviewing the small system affordability criteria and variance
process; (2) developing a small community assistance plan to improve access to
financial and technical assistance, improve compliance capacity, and simplify the use
of exemptions; and (3) implementing a $20 million research and technical assistance
strategy. In 2002, the EPA issued Implementation Guidance for the Arsenic Rule,
which includes guidance to help states grant exemptions. The EPA has offered
technical assistance to small systems and has sponsored research on low-cost
treatment technologies for arsenic. Also, the EPA is working with small communities
to maximize loans and grants under SDWA and the U.S. Department of Agriculture
water infrastructure programs.²²
Congress continued to express concern about the cost of compliance with the
arsenic rule. The conference report for the Consolidated Appropriations Act for
FY2005 directed the EPA to report to Congress on the extent to which communities
will be affected by the arsenic rule, and to propose compliance alternatives and make
recommendations to minimize compliance costs. Congress also provided $8.3
million for research on cost-effective arsenic removal technologies.
In March 2006, the EPA proposed three options for revising its affordability
criteria for determining whether a compliance technology is unaffordable for small
systems (71 Federal Register 10671). States could use the criteria to grant small-
system variances when systems cannot afford to comply with a standard. Using the
current criteria, the EPA considers a technology affordable unless the average
compliance cost exceeds 2.5% of the area’s median household income. To date, the
EPA has determined that affordable technologies are available for all standards. The
three proposed options are well below that level: 0.25%, 0.50%, and 0.75%. In
addition, the revised criteria are intended to address the issue of how to ensure that
a variance technology would be protective of public health. The EPA proposed that
the final criteria would apply only to the recent Stage 2 DBP and future rules.
During the 109^th Congress, various bills were introduced to help small public
water systems comply with the arsenic standard and other rules. The EPA’s FY2007
funding bill, as reported by the Senate Committee on Appropriations (H.R. 5386,
S.Rept. 109-275), would have required the EPA to make available at least $11
million for small system compliance assistance. S. 1400, a water infrastructure
financing bill reported by the Senate Environment and Public Works Committee,

²² For information on USDA and other assistance programs, see CRS Report RL30478,
Federally Supported Water Supply and Wastewater Treatment Programs.

proposed to increase DWSRF funding and create a grant program for priority
projects, including projects to help small systems comply. S. 41 and H.R. 1315
would have directed states to grant qualified small water systems exemptions for
naturally occurring contaminants. H.R. 4495 would have required EPA to give
water systems serving 65,000 or fewer individuals two more years to comply with the
arsenic rule. S. 2161 would have prevented the enforcement of SDWA regulations
for small systems unless the EPA has identified a variance technology and sufficient
DWSRF funds were made available. S. 2161 also would have established new
affordability criteria for treatment technologies. Companion bills H.R. 2417 and S.
689 proposed to require the EPA to establish a small system grant program to help
qualified communities comply with standards, delay state enforcement of the arsenic
rule until states implement the grant program, and prevent the EPA from enforcing
a standard during the grant application process. No further action occurred on this
bill. (For information on EPA appropriations for FY2007, see CRS Report RS22386,
Environmental Protection Agency:FY2007 Appropriations Highlights, by David M.
Bearden and Robert Esworthy.)
Congressional Hearings, Reports, and Documents
U.S. Congress. House. Committee on Energy and Commerce. Subcommittee on
Environment and Hazardous Materials. Tapped Out: Lead in the District of
Columbia and the Providing of Safe Drinking Water. Hearing, July 22, 2004,^th^nd

108 Cong., 2 sess. 155 p. (H.Rept. 108-97).

U.S. Congress. House. Committee on Government Reform. Public Confidence,
Down the Drain: the Federal Role in Ensuring Safe Drinking Water in the^th^nd
District of Columbia. Hearing, March 5, 2004, 108 Cong., 2 sess. 268 p.
(H.Rept. 108-161).
U.S. Congress. House. Committee on Government Reform. Subcommittee on Energy
Policy, Natural Resources and Regulatory Affairs. The EPA Water
Enforcement: Are We on the Right Track? Hearing, October 14, 2003, 108^th^st
Cong., 1 sess. 201p. (H.Rept. 108-157).
U.S. Congress. House. Committee on Transportation and Infrastructure.
Subcommittee on Water Resources and Environment. Aging Water Supply^th^nd
Infrastructure. Hearing, April 28, 2004, 108 Cong., 2 sess. 78 p. (H.Rept.

108-63).

U.S. Congress. Senate. Committee on Environment and Public Works. Water
Infrastructure Financing Act. Report to accompany S. 2550. Oct. 7, 2004. 116
p. (S.Rept. 108-386).

For Additional Reading
U.S. Environmental Protection Agency. The Clean Water and Drinking Water
Infrastructure Gap Analysis Report. Report No. EPA 816-R-02-020.
September 2002. 50 p.
U.S. Environmental Protection Agency. Providing Safe Drinking Water in America:
2002 National Public Water Systems Compliance Report. Report No. EPA

305-R-04-001. Dec. 2004. 96 p.

National Research Council. Health Implications of Perchlorate Ingestion. Board on
Environmental Studies and Toxicology. National Academies Press. Jan. 2005.

177 p.