CRS Report: -

Congress enacted the most recent major amendments to the Clean Water Act in 1987 (P.L. 100-4). Since then, the Environmental Protection Agency (EPA), states, and others have been working to implement the many program changes and additions mandated in the law. At issue today, as it has been for some time, is what progress EPA and the states are making. In general, many states and environmental groups fault EPA for delays in issuing guidance and assistance needed to carry out the provisions of the law. EPA and others are critical of states, in turn, for not reaching beyond conventional knowledge and institutional approaches to address their water quality problems. Environmental groups have been criticized for insufficient recognition of EPA's and states' need for flexibility to implement the Act. Finally, Congress has been criticized for not providing adequate funding and resources to meet EPA and state needs.

Three issues have predominated recently in connection with implementation of the law. The first involves implementation of requirements under current law for states to develop total maximum daily loads (TMDLs) to restore pollution-impaired waters. The second issue involves the nonpoint pollution management provisions added in 1987. States are developing management programs describing methods that will be used to reduce nonpoint pollution, which may be responsible for as much as 50% of the nation's remaining water quality problems. Most observers agree that implementation of nonpoint source control measures is significantly hindered by lack of resources, including federal assistance. EPA adopted program guidance intended to give states more flexibility and to speed up progress in nonpoint source control.

The third issue is funding to construct municipal wastewater treatment plants under the State Revolving Fund provisions of the 1987 amendments. Budgetary constraints on federal aid for wastewater treatment and large remaining funding needs are a continuing concern.

In 1993, EPA began a number of agencywide and program-specific reforms focusing on flexibility and "common sense" approaches to regulation. Many affect implementation of water quality programs. In February 1998, the Clinton Administration released a multi-agency Clean Water Action Plan intended to build on the environmental successes of the Act and address the nation's remaining water quality challenges.

Reauthorization of the Act was on the agenda of the 104th Congress, when the House passed H.R. 961, but no amendments were enacted. Comprehensive legislation was not introduced in the 105th Congress, and no major House or Senate committee activity occurred. Similarly, no major activity occurred in the 106^th Congress, although there was legislative action on individual program areas within the Act. Recent attention has focused on EPA rules for the Act's TMDL program issued in 2000. Congressional oversight of the TMDL program is likely in the 107^th Congress (see CRS Issue Brief IB10069, Clean Water Act Issues in the 107^th Congress.)

The House and Senate have passed separate versions of legislation providing funding for EPA for FY2002 (H.R. 2620). The House-passed bill includes $1.2 billion for clean water SRF grants, while the Senate version includes $1.35 billion (the same level enacted for FY2001). President Bush's budget for FY2002, presented in April, requested $850 million for clean water SRF grants and $450 million for a new grant program to assist municipal sewer overflow problems. Neither bill includes the requested funds for sewer overflow grants. Final congressional action is expected in September.

In August 1999, EPA proposed regulations to clarify and strengthen regulations that govern a Clean Water Act (CWA) program intended to restore impaired waters, the Total Maximum Daily Load (TMDL) program. The proposal became highly controversial because of issues such as burdens on states to implement the TMDL program and potential impacts on some agriculture and forestry sources which are not now subject to CWA regulations. House and Senate committees held oversight hearings to examine EPA's proposal, and several legislative proposals on TMDL issues were introduced. Prior to the July 4^th, 2000, congressional recess, Congress approved an appropriations bill with a provision to prevent EPA from spending any funds in FY2000 or FY2001 to finalize or implement new TMDL rules. President Clinton signed the bill on July 13, 2000, in spite of the TMDL provision, which the Administration opposed (P.L. 106-246). However, the EPA Administrator signed the new TMDL rules on July 11, 2000, but delayed the effective date until October 2001 when the limitation in P.L. 106-246 is due to expire. Controversies about the new rules persist. The Bush Administration proposes to delay the rules until May 2002 for further review.

The Federal Water Pollution Control Act, or Clean Water Act, is the principal law concerned with polluting activity in the nation's streams, lakes, and estuaries. Originally enacted in 1948, it was totally revised by amendments in 1972 (P.L. 92-500) that gave the Act its current form and spelled out ambitious programs for water quality improvements that are now being put in place by industries and cities. Congress made certain fine-tuning amendments in 1977 (P.L. 95-217) and 1981 (P.L. 97-117).

The Act consists of two major parts: regulatory provisions that impose progressively more stringent requirements on industries and cities in order to meet the statutory goal of zero discharge of pollutants, and provisions that authorize federal financial assistance for municipal wastewater treatment construction. Industries were to meet pollution control limits first by use of Best Practicable Technology and later by improved Best Available Technology. Cities were to achieve secondary treatment of municipal wastewater (roughly 85% removal of conventional wastes), or better if needed to meet water quality standards. Both major parts are supported by research activities authorized in the law, plus permit and penalty provisions for enforcement. These programs are administered by the Environmental Protection Agency (EPA), while state and local governments have the principal day-to-day responsibility for implementing the law. (Note: A summary of the Act with details and "hot links".)

The most recent amendments, enacted in February 1987, are the Water Quality Act of 1987 (P.L. 100-4). These amendments culminated 6 years of congressional efforts to extend and revise the Act and are the most comprehensive amendments to it since 1972. They recognize that, despite much progress to date, significant water quality problems persist. Among its many provisions, the 1987 legislation:

Legislative Activity after P.L. 100-4. Congressional oversight of water quality issues was limited following enactment of P.L. 100-4. Subcommittees held general oversight hearings, as well as several hearings on individual issues (wetlands protection, Chesapeake Bay programs, and toxics contamination of Great Lakes waters), but reserved extensive review and oversight until implementation had been underway for some time.

EPA, the states, industry, and other citizens continue to implement the 1987 legislation, including meeting the numerous requirements and deadlines in it. Three sets of issues have been the focus of attention regarding the pace and effectiveness of implementation: the toxic pollutant control provisions, nonpoint pollution management provisions, and the State Revolving Fund provisions to transfer wastewater treatment funding responsibility to the states after 1994. Attention has also focused on the cost-effectiveness of clean water requirements and flexibility of implementation.

Implementation issues discussed below were the basis for legislation to reauthorize the Clean Water Act during the 103rd Congress. Committees held hearings in 1993, and the Senate Environment and Public Works Committee reported a comprehensive reauthorization bill, S. 2093, in May 1994. Legislation also was introduced in the House , but no further action occurred because of controversies specific to the Act and the pending bills, as well as controversies over regulatory relief issues that became barriers to a number of bills in 1994.

In the 104th Congress, the House moved quickly on Clean Water Act legislation, approving a comprehensive reauthorization bill on May 16, 1995. H.R. 961 would have amended many of the regulatory and standards provisions of the law, required EPA to use extensive new risk assessment and cost-benefit analysis procedures, and increased flexibility with regulatory relief from current clean water programs. However, the Senate did not take up the Clean Water Act during the 104th Congress; thus, no legislation was enacted.

1997 marked the 25-year anniversary of the 1972 Clean Water Act amendments, which established the goals, objectives, and structure that continue to guide the law today. In the 105th Congress, no major committee activity over the Act occurred either in the House or the Senate. In the 106^th Congress, legislative attention focused on individual program areas of the law; no comprehensive reauthorization legislation was introduced. However, activity on bills dealing with specific water quality issues did occur. Congress passed a bill to strengthen protection of coastal recreation waters through upgraded water quality standards and coastal waters monitoring programs (P.L. 106-284). Congress also passed a bill reauthorizing several existing CWA programs (i.e., Chesapeake Bay, clean lakes, and the National Estuary Program; P.L. 106-457). Further, Congress passed a bill to authorize CWA grant funding for wet weather sewerage projects (included as a provision of H.R. 4577, FY2001 Consolidated Appropriations bill). (For detailed information, see CRS Report RL30908 (pdf), Clean Water Act Issues and Legislation in the 106^th Congress.)

Implementation issues that have been the focus of attention in recent Congresses, along with concerns over flexibility and regulatory relief, are expected to predominate when Congress does take up reauthorization in the future. In February 1998, the Administration released a multi-agency Action Plan to implement a Clean Water Initiative intended to build on the environmental successes of the Act and address the nation's remaining water quality challenges (see discussion below, The Administration's Clean Water Initiative).

Section 303(d) of the Clean Water Act requires states to identify pollutant-impaired water segments and develop "total maximum daily loads" (TMDLs) that set the maximum amount of pollution that a water body can receive without violating water quality standards. If a state fails to do so, EPA is required to develop a priority list for the state and make its own TMDL determination. Most states have lacked the resources to do TMDL analyses, which involve complex assessment of point and nonpoint sources and mathematical modeling, and EPA has both been reluctant to override states and has also lacked resources to do the analyses. Thus, there has been little implementation of the provision that Congress enacted in 1972. In recent years, national and local environmental groups have filed more than 40 lawsuits in 38 states against EPA and states for failure to fulfill requirements of the Act. Of the suits tried or settled to date, 19 have resulted in court orders requiring expeditious development of TMDLs. EPA and state officials have been concerned about diverting resources from other high-priority water quality activities in order to meet the courts' orders. In 1996, EPA created an advisory committee to solicit advice on the TMDL problem. Recommendations from the advisory committee formed the basis of program changes that EPA proposed in August 1999. The 1999 proposal set forth criteria for states, territories, and authorized Indian tribes to identify impaired waters and establish all TMDLs within 15 years. It would require more comprehensive assessments of waterways, detailed cleanup plans, and timetables for implementation. (For additional information, see CRS Report 97-831 (pdf), Clean Water Act and Total Maximum Daily Loads (TMDLs) of Pollutants.)

The 1999 proposal was highly controversial because of issues such as burdens on states to implement a revised TMDL program and potential impacts on some agriculture and forestry sources which are not now subject to CWA regulations. The controversies also have drawn congressional attention, and 13 congressional hearings were held during the 106^th Congress by the House Agriculture Committee, Senate Agriculture Committee, House Transportation and Infrastructure Committee, and Senate Environment and Public Works Committee. Public and congressional pressure on EPA to revise or withdraw the TMDL proposal entirely was great. Several legislative proposals to modify EPA's TMDL proposals or delay implementation of final rules were introduced (For information see CRS Report RL30908 (pdf), Clean Water Act Issues and Legislation in the 106^th Congress).

TMDL issues also were addressed in FY2001 appropriations bills. Before the July 4^th, 2000, congressional recess, the House and Senate approved a FY2001 Military Construction and emergency supplemental appropriations bill (H.R. 4425, H.Rept. 106-710) that included a provision to prevent EPA from spending any funds in FY2000 or FY 2001 to finalize or implement new TMDL rules. President Clinton signed the bill on July 13, 2000, in spite of the TMDL provision, which the Administration opposed (P.L. 106-246). However, the EPA Administrator signed the new TMDL rules on July 11 but delayed the effective date until October 2001 when the limitation in P.L. 106-246 is due to expire. (For information, see CRS Report 30611, EPA's Total Maximum Daily Load (TMDL) Program: Highlights of the Final Revised Rule.) EPA's actions to sign the rule before the rider took effect led to more criticism. Another bill, H.R. 4922, proposed that the TMDL program changes issued in July be subject to more public comment, as well as formal studies by EPA and the NAS. Further, on October 10, the Senate passed S. 2417 (S.Rept. 106-485), authorizing increased grants to states for TMDL development and implementation and calling for several studies of the new TMDL rule and the effectiveness of pollution control programs. No further action occurred on these various bills.

In addition, the FY2001 appropriation act providing funds for EPA, P.L. 106-377, included report language mandating studies by the National Academy of Sciences (NAS) and EPA on the scientific basis of the TMDL program and on the potential costs to states and businesses of implementing the revised TMDL rules. The NAS report, examining the role of science in the TMDL program, was issued June 15. It did not specifically analyze the July 2000 revised regulations. The NAS panel concluded that scientific knowledge exists to move forward with the TMDL program and recommended that EPA and states use adaptive implementation for TMDL development. In many cases, the report said, water quality problems and solutions are obvious and should proceed without complex analysis. In other cases, solutions are more complex and require a different level of understanding and something like phased implementation. A House Transportation Committee subcommittee held a hearing on the NAS report on June 28. EPA issued a draft report on costs of the 2000 TMDL program in August, estimating that average annual costs to states and EPA of developing TMDLs could be $63-$69 million, while implementation costs for pollutant sources could be between $900 million and $4.3 billion per year, depending on states' actions.

For now, the revised rules issued in July 2000 are on hold until October 2001, pursuant to EPA's action to delay the effective date; thus, existing rules and requirements and court-sanctioned TMDL schedules remain in place. However, the Bush Administration formally proposed on August 9 to delay the October effective day for 18 months (until May 2002) to allow EPA officials time to review the 2000 rule. The Administration also is seeking a similar stay of litigation that is challenging the regulation (nearly a dozen interest groups sued EPA over various parts of the TMDL rule). The court has not yet acted on EPA's request. Congressional oversight is likely to continue in the 107^th Congress.

The 1987 amendments added a new Section 319 to the Act, under which states were required to develop and implement programs to control nonpoint sources of pollution, or rainfall runoff from farm and urban areas, as well as construction, forestry, and mining sites. Previously, the Act had largely focused on controlling point sources, while helping states and localities to plan for management of diverse nonpoint sources. Yet, as industrial and municipal sources have abated pollution, uncontrolled nonpoint sources have become a relatively larger portion of remaining water quality problems -- perhaps contributing as much as 50% of the nation's water pollution.

States were required to identify waters not expected to meet water quality standards -- because of nonpoint source pollution and to implement plans for managing pollution from runoff. Federal grants were authorized to cover as much as 60% of the costs of implementing a state's management plan. A total of $400 million was authorized to be appropriated for these grants.

The funding issue has become more urgent as states have moved from assessment and plan development to management, since Congress intended that Section 319 funds be used primarily to implement nonpoint pollution controls on the ground. EPA has urged states to use a portion of monies that they receive under Section 106 of the Act, water quality program assistance grants, for nonpoint source activities. But, doing so utilizes money otherwise needed for core state efforts, such as permit issuance, monitoring, enforcement, etc. Several concerns have been raised about the Section 319 program.

Adequacy of Plans. Whether state plans have comprehensively addressed nonpoint pollution problems is a lingering question. Some environmental groups criticize EPA for providing inadequate guidance on methods, or management practices, to advance control of nonpoint sources beyond known problems and existing implementation steps, such as voluntary compliance and public education. Moreover, some believe that states should be required to repeat the nonpoint source assessments, which were one-time-only activities under the 1987 law, in order to reflect improvements in technical and scientific information.

Quality of Plans. EPA officials acknowledge that the quality of assessment reports and management plans is quite variable and that many (including some that have been approved) have been disappointing. Several reasons are cited: staff limitations affecting states' and EPA regions' ability to prepare and oversee plans; lack of funding; limited federal clout, since the program is essentially voluntary; and variations in the way regions administered the program.

Funding. Precise estimates of the cost to manage nonpoint source pollution are not available, but in 1994 EPA estimated that current and planned spending by private sources, states, and cities under provisions of current law is between $750 million and $1.1 billion per year. Without adequate funding to implement state management plans, it is doubtful that much will be achieved under Section 319 to control nonpoint source pollution. Lack of funding risks the possibility of Section 319 becoming the Section 208 of this decade: in the 1970s, states and regions used federal assistance to prepare areawide waste treatment management plans under Section 208 of this Act, intended to comprehensively cover point and nonpoint sources. No implementation monies were authorized, and few of the plans were realized, as a result.

Program Changes. EPA and states negotiated changes intended to give the 319 program a new framework by giving states more flexibility. As a result, in May 1996, EPA issued revised guidance concerning state management of nonpoint source programs that is intended to recognize that federal and state processes need to be streamlined to increase program effectiveness and to speed progress towards solving nonpoint pollution problems. The revised guidance outlines nine key elements to be reflected in state programs (e.g., strong partnerships with stakeholders, explicit short and long term goals for protecting surface and ground waters). States that meet the nine criteria can be designated as leadership states, making them eligible for incentives such as multi-year grants, reduced amount and frequency of reporting, and self-assessment by states themselves. These incentives contrast with the previous program approach, in which states competed for grants and those which did not meet particular requirements received less grant money. The flexibility in this program area is a key example of EPA's efforts to adopt regulatory reform throughout its activities (see discussion below, Reinventing Government at EPA).

The Act's program of financial aid for municipal wastewater treatment plant construction was a central and controversial aspect of debate on the 1987 amendments. Since 1972 Congress has provided $73 billion to assist wastewater treatment construction, but funding needs remain very high: an additional $139.5 billion nationwide over the next 20 years for all types of projects eligible for funding under the Act, according to the most recent estimate by EPA and the states completed in 1996 (the report is available from EPA via http://www.epa.gov/owm/toc.htm). EPA is currently completing a new study, called the Gap Analysis, to assess the difference between current federal funding for CWA programs and total funding needs. Drafts of this analysis reportedly indicate that, over the next two decades, the United States needs to spend $300 billion to replace existing wastewater infrastructure systems and to build new ones. According to the new data, by the year 2020, the United States will need to spend $21 billion per year to meet capital expenditures for wastewater treatment, compared with about $9.4 billion being spent annually now. At issue has been what should be the federal role in assisting states and cities, especially in view of such high projected funding needs.

The 1987 amendments extended through FY1990 the traditional Title II program of grants for sewage treatment project construction, under which the federal share was 55% of project costs. The 1987 law initiated a program of grants to capitalize State Water Pollution Control Revolving Funds (SRFs), or loan programs, in a new Title VI. States are required to deposit an amount equal to at least 20% of the federal capitalization grant in the Fund established under Title VI. Under the revolving fund concept, monies used for wastewater treatment construction would be repaid by loan recipients to the states (repayment was not required for grants under the Title II program), to be recycled for future construction in other communities, thus providing an ongoing source of financing. The expectation in 1987 was that the federal contributions to SRFs would assist in making a transition to full state and local financing by FY1995. While most states believe that the SRF is working well, early funding and administrative problems led many to believe that the anticipated shift to full state responsibility will be delayed. Thus, SRF issues were prominent on the Clean Water Act reauthorization agenda in the 103rd and 104th Congresses. (For further information, see CRS Report 98-323, Wastewater Treatment: Overview and Background.)

SRF monies may be used for certain types of financial activity, including loans for as much as 100% of project costs (at or below market interest rates, including interest-free loans), to buy or refinance cities' debt obligation, or as a source of revenue or security for payment of principal and interest on a state-issued bond. SRF monies also may be used to provide loan guarantees or credit enhancement for localities.

Loans made by a state from its SRF are to be used first to assure progress towards the goals of the Act and, in particular, on projects to meet the standards and enforceable requirements of the Act. After states achieve those requirements of the Act, SRF monies also may be used to implement nonpoint pollution management and national estuary programs.

Table 1 summarizes wastewater treatment funding under Title II (traditional grants program) and Title VI (capitalization grants for revolving loan programs). (Note: Table 1 does not include grant appropriations for special projects in individual cities.)

	Authorizations		Appropriations
Fiscal Year	Title II	Title VI	Title II	Title VI
1986	$2.4	--	$1.8	--
1987	2.4	--	2.36	--
1988	2.4	--	2.3	--
1989	1.2	1.2	0.941	0.941
1990	1.2	1.2	0.967	0.967
1991	--	2.4	--	2.1
1992	--	1.8	--	1.95
1993	--	1.2	--	1.93
1994	--	0.6	--	1.22
1995	--	--	--	1.24
1996	--	--	--	2.07
1997	--	--	--	0.625
1998	--	--	--	1.35
1999	--	--	--	1.35
2000	---	---	---	1.345
2001	--	--	--	1.35

Small Communities. One issue of interest is impacts on small communities. These entities in particular have found it difficult to participate in the SRF loan program, since many are characterized by narrow or weak tax bases, limited or no access to capital markets, lower relative household incomes, and higher per capita needs. They often find it harder to borrow to meet their capital needs and pay relatively high premiums to do so. Meeting the special needs of small towns, through a reestablished grant program, other funding source, or loan program with special rules, has been an issue of interest to Congress.

Congressional oversight of wastewater/SRF issues has focused on several points, including: many small communities have found it difficult to participate in the SRF loan program, and the lack of funds for high-cost categories of projects such as correcting combined sewer overflows. The General Accounting Office has stated that two SRF funding issues predominate. First is the gap between funding levels authorized in the Act and state needs. Second is the small community problem. Over a 10-year period, according to GAO, SRFs will only meet about one-third of the states' funding needs and will generally not meet the needs of poor communities.

While there has been some criticism of the SRF program, and debate continues over specific concerns (such as small community impacts), the basic approach is well supported in Congress and elsewhere. Congress used the clean water SRF as the model when it established a drinking water SRF in legislation that reauthorized the Safe Drinking Water Act in 1996 (P.L. 104-182). (For further information, see CRS Report 97-677, Safe Drinking Water Act: State Revolving Fund Program.)

A number of other Clean Water Act issues continue to receive attention, as well. Like those discussed previously, many of these topics have recently been part of Congress' agenda in connection with reauthorization (see CRS Issue Brief IB10001).

Stormwater Discharges. EPA has struggled since the 1970s to regulate industrial and municipal stormwater discharges in a workable yet comprehensive manner. In P.L. 100-4 Congress established firm deadlines and priorities for EPA to require permits for these discharges of stormwater that is not mixed or contaminated with household or industrial waste. EPA issued rules in November 1990 (21 months after the statutory deadline) that addressed the process of applying for stormwater permits. The burden of complying with the rules continues to be an issue with many affected industries and municipalities, especially small cities. EPA worked with an advisory committee of stakeholders beginning in 1994 to develop rules for regulating smaller stormwater dischargers, which were not covered by EPA's 1990 rules. Rules for smaller dischargers (unregulated industries and small cities) were issued in October 1999. (For further information, see CRS Report 97-290, Stormwater Permits: Status of EPA's Regulatory Program.)

Combined and Separate Sewer Overflows. Nearly 1,200 municipalities have combined sewers where domestic sanitary sewage, industrial wastes, infiltration from groundwater, and stormwater runoff are collected. These systems serve approximately 40 million persons, mainly in older urban and coastal cities. Normally (under dry-weather conditions), the combined wastes are conveyed to a municipal sewage treatment plant.

Properly designed, sized, and maintained combined sewers can be an acceptable part of a city's water pollution control infrastructure. However, combined sewer overflow (CSO) occurs when the capacity of the collection and treatment system is exceeded due to high volumes of rainwater or snowmelt, and the excess volume is diverted and discharged directly into receiving waters, bypassing the sewage treatment plants. Often the excess flow that contains raw sewage, industrial wastes, and stormwater is discharged untreated. Many combined sewer systems are found in coastal areas where recreational areas, fish habitat and shellfish beds may be contaminated by the discharges.

In 1994 EPA issued a CSO permitting strategy after negotiations with key stakeholder groups. Cities were to implement nine minimum controls by January 1, 1997 (e.g., proper operation and maintenance programs for sewer systems and pollution prevention programs). The EPA strategy did not contain a deadline for issuance of permits or for controlling CSOs. Deadlines will be contained in plans developed by permitting authorities. Controls are available and generally are based on combinations of management techniques (such as temporary retention of excess flow during storm events) and structural measures (ranging from screens that capture solids to construction of separate sewer systems). EPA officials stated in May 1998 that only about one-half of the cities with combined sewers implemented the minimum measures called for in the 1994 strategy. EPA is now working with states to remind cities of their obligations to address CSO problems. However, a formal enforcement strategy is not contemplated.

A more recent issue concerning some cities is the problem of overflows from municipal separate sanitary sewers (SSOs) that are not CSOs because they transport only sanitary wastes. Discharges of untreated sewage from these sewers occur from manholes, broken pipes and deteriorated infrastructure, and undersized pipes, and can occur in wet or dry weather. EPA estimates that there are about 18,000 municipalities with separate sanitary sewers, all of which can, under certain circumstances, experience overflows. No explicit EPA or statutory control policy currently exists. In 1995, EPA convened a stakeholders' group to discuss how to address those overflows that pose the highest environmental and public health risk first. On January 5, 2001, the Clinton Administration finalized regulations that will improve the operation of municipal sanitary sewer collection systems, reduce the frequency and occurrence of overflows, clarify the existing CWA prohibition on SSO discharges, and clarify circumstances appropriate for enforcement action. The new rules, not yet published, are being reviewed by the Bush Administration.

Funding CSO and SSO projects is a major concern of states and cities. In December, the 106^th Congress passed legislation, the Wet Weather Water Quality Act, authorizing a $1.5 billion grants program to reduce wet weather flows from municipal sewer systems. This bill was included in H.R. 4577, the FY2001 Consolidated Appropriations bill (Section 112 of Division B, P.L. 106-554). The measure also codifies EPA's 1994 CSO policy on sewer overflows (discussed above).

Wetlands. Public debate over the nation's wetlands has come to focus on questions of the effectiveness and costs of wetland resource protection efforts, rather than on whether such resources should be preserved. The permit program authorized by Section 404 of the Clean Water Act is one of the major federal programs that protects wetlands. However, environmentalists and others have criticized Section 404 as being inadequate to prevent the continuing loss of wetlands, due to statutory exemption of certain types of actions on farmlands and weak enforcement. Those wishing to develop wetlands maintain that existing laws are already an intrusion on private land-use decisions and that further federal involvement is unwarranted. How best to protect remaining wetlands and regulate activities taking place in wetlands has become one of the most contentious environmental policy issues facing Congress and was a prominent element of clean water debate during the 103rd and 104th Congresses. (See CRS Issue Brief IB97014, Wetland Issues.)

EPA was at the center of many of the Clinton Administration's efforts to reinvent government. Some of EPA's projects were intended to fix problem areas in the implementation of current law; others were intended to set future directions. The initiatives were, in part, a response to budgetary pressures and the need to be more efficient. The agency also was responding to pressures from the Congress to reform the way it does business and the realization that Congress may change the agency, if it fails to change itself. (For further information, see CRS Report 96-283, Reinventing the Environmental Protection Agency and EPA's Water Programs.) For now, it is unclear how the new Bush Administration will view the reinvention activities at EPA -- whether they will be continued, rejected, or modified and renamed to reflect new priorities. Broadly, the reinvention activities at EPA during the Clinton Administration fit in three categories.

Performance Partnership System between EPA and States. In May 1995 EPA and states entered into a formal agreement intended to fundamentally redesign and improve the federal-state partnership on environmental protection. States will be allowed more authority to set priorities and tailor implementation, while EPA agrees to allow states greater flexibility and reduce oversight of states that demonstrate exceptional performance. (For further information, see CRS Report 97-689 ENR, Environmental Policy: Issues in Federal-State Relations.) One element of the partnership program is a more flexible approach to funding, through block grants to be called Performance Partnership Grants, in lieu of traditional categorical grants for air, water, hazardous waste, etc. Consolidated grants are intended to reduce administrative burdens and improve environmental performance by allowing states to target funds to meet their specific needs. Congress endorsed the consolidated grants approach in EPA's FY1996 funding bill, P.L. 104-134, and has supported it in subsequent appropriations bills, as well.

Initiatives for Industry. The second category was new regulatory partnerships between EPA and industry intended to apply more common sense and economical approaches to environmental regulation. These initiatives were equivalent to the federal-state performance partnerships. The centerpiece of these activities was EPA's Common Sense Initiative (CSI), through which six industry sectors were identified and corresponding task groups established to debate and restructure environmental requirements based on industry sectors, rather than pollutant by pollutant or media by media. Other industry activities included Project XL, giving selected entities the opportunity to demonstrate innovations to meet environmental goals outside the current regulatory framework; a Common Sense Compliance Program of incentives for small businesses; and a reexamination of all of the agency's permitting programs to adopt performance-based improvements.

Program-Specific Initiatives. Third was activities in individual program areas, including water quality, that involved regulatory reform initiatives in specific terms and reflected a devolution to states (transfer of powers and authorities from the federal government). In the water quality program, many of the initiatives started from a watershed approach to problem-solving. This approach recognizes that remaining water quality problems require attention to diffuse (nonpoint) as well as discrete (point source) pollution sources managed on the basis of geographic areas defined by natural or hydrologic features, instead of political boundaries. Further, the watershed approach is more community-based than top-down in emphasis and is intended to be a process that involves key government, citizen, and other user groups as full partners in developing solutions. EPA has been encouraging the watershed approach to address specific water pollution issues, especially wet weather pollution problems (nonpoint sources, stormwater, and sewer system overflows) and implementation of TMDL requirements under current law.

Some observers said that the types of changes occurring at EPA through these initiatives were logical next steps in the evolution of environmental programs. Others said that what was occurring was a sea change in policy without clear prospects that environmental benefits would result. In addition, some were concerned that the many activities have insufficient focus or priority. Most participants were enthusiastic about the changes affecting the EPA-state and EPA-industry relationships (although many concluded that some programs, such as Project XL, have proved difficult and time-consuming while yielding few benefits). Still, there were concerns about how some of the broad initiatives would be implemented and about if, in EPA's enthusiasm for state flexibility and reduced federal oversight, support for core elements of environmental protection programs would be diminished.

In October 1997, on the 25^th anniversary of the CWA, Vice President Gore announced an initiative intended to build on the environmental successes of the Act and to address the nation's remaining water quality challenges, especially nonpoint source pollution. The Vice President directed EPA and USDA to coordinate with other federal agencies to develop an action plan to improve and strengthen water pollution control efforts. The purpose of the plan was to coordinate federal efforts to achieve three goals: enhanced protection from public health threats posed by water pollution, more effective control of polluted runoff, and promotion of water quality protection on a watershed basis. Other departments involved in the Initiative included USDA, the Departments of the Interior and Commerce, and the U.S. Army Corps of Engineers.

President Clinton and Vice President Gore released the action plan on February 19, 1998. Components of the plan, nearly 110 actions, consisted mainly of existing programs, including some planned regulatory actions that agencies had had underway, to be enhanced with increased funding or accelerated with performance-specific deadlines. (The text is available at http://www.cleanwater.gov/.) The individual elements of the plan were built on 4 concepts: utilizing collaborative watershed-based partnerships to clean up impaired waters; maintaining strong federal and state standards; calling on federal natural resource and conservation agencies to assist in restoring and protecting watersheds; and ensuring that citizens and officials have improved information for decisionmaking.

Complementing the plan, President Clinton's FY1999 budget identified the Clean Water Initiative as a high-priority for environmental programs in the budget. It requested a total of $2.5 billion, a $609 million, or 33%, increase over 1998, to fund activities in 5 departments and agencies, plus interagency funds. Almost one-half of the total increases, $265 million, was designated as assistance to states and localities or to individual landowners (farmers).

The action plan was not accompanied by proposals or legislation to reauthorize the CWA. In Congress, it was considered primarily through the appropriations process, rather than authorizing committee activity. President Clinton's FY1999 budget submission identified it as a high priority. That year's was the first of three Clinton budgets that proposed funds to implement the Plan. During the years FY1999-2001, Congress provided a total of $1.24 billion in increases for Plan activities above FY1998 baseline amounts. Each year's budget request was higher than the preceding year's, and while Congress agreed to some increases, it appropriated amount less than the Administration had sought. EPA and USDA officials said that the action plan will be implemented, even though appropriations have been less than requested. Implementation will occur, they said, because they believe that its many actions are the only way to achieve the Clean Water Act's water quality goals. (For additional information, see CRS Report 98-150, Clean Water Action Plan: Background and Early Implementation, and CRS Report 98-745, Clean Water Action Plan: Budgetary Initiatives.)

On May 13, 1999, the Senate Environment and Public Works Committee held the first congressional oversight hearing on the Plan outside the appropriations process. The Committee heard from federal and state government representatives, as well as members of the public. Agency witnesses addressed how the Plan is involving the public, states and localities, and federal agencies in intergovernmental partnerships. Other witnesses and some Committee members questioned the degree to which the Plan actually reflects state, local, public and congressional input and whether federal agencies have the legal authority to be taking some of the contemplated actions. Questions also were raised about the scientific basis of the Plan, because of inadequate national water quality data.

Strategy Concerning Animal Feeding Operations. A key element of the Clean Water Initiative, minimizing public health and environmental impacts of runoff from animal feeding operations (AFOs) into rivers, lakes, and estuaries, was addressed by a national strategy issued jointly by EPA and USDA on March 9, 1999. Animal feeding operations are agricultural facilities that confine feeding activities, thus concentrating animal populations and manure. Animal waste, if not managed properly, can run off farms and pollute nearby water bodies. Agricultural runoff has been linked to dangerous toxic microorganisms such as Pfiesteria piscicida, which is widely believed to be responsible for major fish kills and disease events in several mid-Atlantic states.

Existing EPA regulations, issued in the 1970s, require CWA discharge permits for the largest AFOs (about 6,600 out of 450,000 total facilities nationwide). However, EPA acknowledged that compliance and enforcement of these permit rules has been poor (less than one-third of covered facilities actually have permits) and that the regulations themselves are outdated. For example, they do not reflect changed waste management practices or address the need for management plans dealing with land application of manure. The national strategy contains a number of short-term and long-term steps to improve compliance and strengthen existing regulations, obtain better information through data collection and research on water quality impairments due to AFOs, and together with other federal agencies and states, coordinate activities related to AFOs. In December 2000, EPA proposed rules to increase the number of AFOs required to obtain CWA permits and to restrict land application of animal wastes. On May 16, a House Transportation and Infrastructure subcommittee held an oversight hearing on the December regulatory proposal. Issues that Congress has addressed and is likely to continue reviewing include impacts and costs imposed on the agricultural sector, especially small farmers, and how the proposed combination of regulatory and incentive-based measures in the 1999 National AFO Strategy will achieve control of agricultural runoff that adversely affects water quality. (For additional information, see CRS Report RL30437, Water Quality Initiatives and Agriculture.) In legislation providing FY2000 funding for EPA (P.L. 106-74), Congress directed EPA in conjunction with USDA to submit a report to Congress by May 15, 2001, providing a cost and capability assessment of the AFO strategy. This report is now expected to be delivered to Congress in December.

Like the EPA reinvention activities pursued by the Clinton Administration (discussed above), the Bush Administration's views on the Clean Water Initiative are unknown. So far, the new Administration has not announced or undertaken steps to continue, reject, or modify specific Clean Water Action Plan activities begun during the previous administration.

While the 1987 Clean Water Act amendments dealt with financial aid issues, funding questions have continued to arise and be addressed in the context of appropriations. (For additional information, see CRS Report 96-647, Water Infrastructure Financing: History of EPA Appropriations.)

FY2002. On April 10, the Bush Administration presented its budget request for FY2002. Overall for EPA, the budget seeks $7.3 billion, about 6.4% below the FY2001 enacted level as a result of eliminating $499 million of unrequested spending earmarked by Congress. The Administration requests a total of $1.3 billion for clean water infrastructure funds, consisting of $850 million for clean water SRF grants (compared with $1.35 billion appropriated for FY2001) and $450 million for a new program of municipal sewer overflow grants under legislation enacted in December (discussed above). However, that legislation, the Wet Weather Water Quality Act, provides that sewer overflow grants are only available in years when at least $1.35 billion in clean water SRF grants is appropriated. The Administration explains that the $1.3 billion total is higher than the Clinton Administration had requested in recent years and that the request continues to support an overall goal of providing $2 billion average in annual financial over the long-term (which also was the Clinton Administration's goal). The Bush budget requests no funds for special earmarked grants, except for $75 million to fund projects along the U.S.-Mexico border and $35 million for projects in Alaskan Native Villages (both are the same amounts provided in FY2001). Other water quality funds proposed in the budget are about level with FY2001 enacted levels, except for elimination of unrequested spending earmarked by Congress. Some Members of Congress and outside groups have criticized the budget request, saying that it does not provide enough support for water infrastructure programs.

As of August, the House and Senate have passed separate versions of EPA's FY2002 funding bill (H.R. 2620). Neither bill includes funds for the new sewer overflow grant program requested by the Administration. The House-passed bill includes $1.2 billion for clean water SRF grants and reserves $200 million for special project grants. The Senate-passed version includes $1.35 billion for clean water SRF grants, plus $140 million for earmarked project grants. Final congressional action is expected in September.

FY2001. The Clinton Administration's FY2001 budget requested $800 million for clean water SRF grants, the same level requested for FY2000, but which Congress rejected (see following discussion). Members of Congress and interest group representatives criticized this funding request (a 40% decrease from FY2000), especially in view of recent data concerning infrastructure funding needs over the next two decades (see discussion above, State Revolving Fund Provisions). The budget also proposed several major budget increases for other clean water programs, including: $50 million more for state grants to manage nonpoint pollution programs (the Section 319 program; a total of $250 million); $45 million more for state grants for general administration of water quality programs, with the increase intended to support state TMDL activities (Section 106 grants; a total of $160 million); and $50 million for a new state grant program to assist with cleanup of Great Lakes contamination problems.

In October 2000, the House and Senate approved EPA's funding bill for FY2001, P.L. 106-377 (H.R. 4635, H.Rept. 106-988), providing $1.35 billion for clean water SRF grants (the same level enacted for FY2000). The enacted bill included $110 million for water infrastructure project grants in rural and Alaskan Native villages and along the U.S.-Mexico border. It included an additional $336 million for a number of other specified project grants throughout the country. In addition, the bill provided $1,008 million for state categorical program grants ($60 million less in total than requested), including $38 million more than requested for nonpoint pollution management grants and $56.6 million more for Section 106 grants, intended to help states meet TMDL program needs. Congress rejected the Administration's request for new Great Lakes cleanup funds.

P.L. 106-377 included report language addressing TMDL regulations promulgated by EPA in July 2000 (see discussion above, TMDLs). It directed studies by the National Academy of Sciences and EPA on the scientific basis of the TMDL program and on the potential costs to states and businesses of implementing the revised TMDL rules. It did not invalidate or otherwise alter the TMDL rules.

Subsequently, in December, Congress provided $21 million more for special project water infrastructure grants (in addition to the $336 million in P.L. 106-377) as a provision of H.R. 4577, the FY2001 Consolidated Appropriations bill (P.L. 106-554).

(Note: Congress has held more than 75 hearings on Clean Water Act and water quality issues since enactment of P.L. 100-4. Those highlighted below are a partial list of the most recent published hearings.)

U.S. Congress. House. Committee on Transportation and Infrastructure. Subcommittee on Oversight, Investigations and Emergency Management. Total Maximum Daily Load Initiatives under the Clean Water Act. Hearing, July 27, 2000. 106^th Congress, ^2dt session. Washington, U.S. Govt. Print. Off., 77 p. (106-106)

---- Subcommittee on Water Resources and Environment. Improving Water Quality: States' Perspectives on the Federal Water Pollution Control Act. Hearing, Feb. 28, 2001. 107^th Congress, 1^st session. Washington, U.S. Govt. Print. Off., 53 p. (107-3)

U.S. Congress. Senate. Committee on Agriculture, Nutrition, and Forestry. Water Quality. Hearing, Feb. 23, 2000. 106^th Congress, 2d session. Washington, U.S. Govt. Print. Off., 336 p. (S. Hrg. 106-699)

U.S. Congress. Senate. Committee on Environment and Public Works. Clean Water Action Plan. Hearing, May 13, 1999. 106^th Congress, 1^st session. Washington, U.S. Govt. Print. Off., 148 p. (S. Hrg. 106-389)

---- Subcommittee on Fisheries, Wildlife, and Water. Proposed Rule Changes to the TMDL and NPDES Permit Programs. Hearings, Mar. 1, 23, and May 18, 2000. 107^th Congress, 1^st session. Washington, U.S. Govt. Print. Off., 597 p. (S.Hrg. 106-971)

Goplerud, C. Peter. "Water Pollution Law: Milestones from the Past and Anticipation of the Future." Natural Resources & Environment. v. 10, no. 2, Fall 1995. pp. 7-12.

Knopman, Debra S. and Richard A. Smith. "20 Years of the Clean Water Act, Has U.S. Water Quality Improved?" Environment. v. 31, no. 1, January/February 1993. pp. 16-20, 34-41.

U.S. Environmental Protection Agency. National Water Quality Inventory: 1998 Report to Congress. Washington, June 2000. "EPA841-R-00-001."

---- 1996 Clean Water Needs Survey Report to Congress. Washington, 1997. 1 vol. "EPA832/R-97-003"

CRS Issue Brief IB97014. Wetland Issues, by Jeffrey Zinn and Claudia Copeland.

IB89102: Water Quality: Implementing the Clean Water Act

August 15, 2001

Claudia Copeland
Resources, Science, and Industry Division

Redistributed as a Service of the National Library for the Environment*

IB89102: Water Quality: Implementing the Clean Water Act

August 15, 2001

Claudia Copeland Resources, Science, and Industry Division

Claudia Copeland
Resources, Science, and Industry Division