97001: Clean Water Act Reauthorization In the 105th Congress

Claudia Copeland
Environment and Natural Resources Division

October 29, 1998

CONTENTS

SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Introduction

Legislative Activity after P.L. 100-4
Legislative Activity in the 104th Congress
The 105th Congress

Funding Municipal Wastewater Treatment
Wet Weather Issues

Nonpoint source pollution
Stormwater
Combined sewer overflows

Critical Areas/Sensitive Habitats

Wetlands

Other Issues

Regulatory relief
Toxic pollutants in the nation's waters
TMDLs and state water quality standards

The Administration's Clean Water Initiative
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
FOR ADDITIONAL READING

CRS Issue Briefs
CRS Reports

SUMMARY

In the 105^th Congress, legislation to reauthorize the Clean Water Act was not been introduced, and no major House or Senate committee activity occurred. In the 104th Congress, the House passed a comprehensive reauthorization bill (H.R. 961), but controversies arose over whether and how the Act should be made more flexible and less burdensome on regulated entities. The Senate did not take up the Clean Water Act during the 104th Congress. The Act could present issues for the 106^th Congress; whether and how it will be considered is unclear at this time.

Clean Water Act amendments in 1987 initiated a program of grants to capitalize State Water Pollution Control Revolving Funds, or loan programs, for wastewater treatment construction. States were to have greater flexibility in exchange for a phaseout of federal assistance after FY1994. However, difficulties that some states (and, particularly, small communities) have had in implementing the new program, coupled with financing needs that are estimated to exceed $130 billion nationwide, have made wastewater treatment funding a key element of the reauthorization debate.

EPA and states' water quality inventories have identified wet weather flows (including agricultural runoff, urban stormwater, and sewer overflows) as the largest remaining threat to water quality. EPA's clean water programs are now focusing to a large extent on solving wet weather pollution problems. These issues may be addressed legislatively, as well. At issue is whether and how to detail

wet weather programs in the Act versus allowing flexibility that recognizes the site-specific nature of intermittent wet weather pollution.

Programs that regulate activities in wetlands, such as Section 404 of the Act, have been criticized by landowners as having expanded to such an extent that regulation intrudes on private land-use decisions and imposes excessive economic burden. Yet, environmentalists and conservationists view these programs as essential for maintaining the health of wetland ecosystems. Resolving the many controversies over Section 404 has become the key issue likely to determine whether comprehensive Clean Water Act legislation will be enacted. There continues to be wide disagreement about the nature of needed reforms, making it difficult for policymakers to reach consensus. Wetland protection issues were debated in connection with the farm bill reauthorization in 1996. Several provisions in the Federal Agricultural Improvement and Reform Act (P.L. 104-127) were intended to make wetland programs which apply to agriculture more flexible.

A number of other issues also have been part of the Clean Water Act debate recently, such as reforming the law to provide regulatory relief for industry, states and cities, and individual landowners. The debate over many of these issues highlights differing views of the Act and its implementation by some who seek to strengthen existing requirements and others who believe that costs and benefits should be more carefully weighed before additional control programs are mandated.

MOST RECENT DEVELOPMENTS

In October 1997, Vice President Gore directed federal agencies to develop a Clean Water Initiative to improve and strengthen the nation's water pollution control efforts. A multi-agency Plan was released on February. 19, 1998, which identifies nearly 100 actions. Most are existing activities, now labeled as part of the Initiative. It did not include legislative proposals to reauthorize the Clean Water Act. The President's FY1999 budget requested $2.2 billion for five departments and agencies to fund the Initiative, which has been considered by Congress primarily through the appropriations process. Final appropriations for FY1999 to fund the Initiative were about 20% of the budgetary increases sought by the Administration.

Congressional committees did not undertake legislative activity on the Clean Water Act in the 105th Congress. However, in April 1997, a House Transportation and Infrastructure subcommittee held oversight hearings on issues that could assist in developing reauthorization legislation. Hearings on clean water and drinking water infrastructure needs and on wetlands issues were held. A Senate Environment and Public Works subcommittee also held a hearing on wetlands issues in June 1997.

BACKGROUND AND ANALYSIS

Introduction

The principal law governing pollution in the nation's streams, lakes, and estuaries is the Federal Water Pollution Control Act (P.L. 92-500, enacted in 1972), commonly known as the Clean Water Act (amended by P.L. 95-217 in 1977, P.L. 97-117 in 1981, and P.L. 100-4 in 1987). It consists of two major parts: regulatory provisions that impose progressively more stringent requirements on industries and cities to abate pollution and meet the statutory goal of zero discharge of pollutants; and provisions that authorize federal financial assistance for municipal wastewater treatment construction. Both parts are supported by research activities, plus permit and enforcement provisions. Programs at the federal level are administered by the Environmental Protection Agency (EPA); state and local governments have major responsibilities to implement those programs. Prior to the 104th Congress, congressional efforts to amend the Act have dealt with all of these aspects, with the objective of strengthening water quality programs. Legislation passed by the House in 1995, but not enacted (H.R. 961), also was comprehensive but had the primary objective of making the law more flexible and less prescriptive.

The objective declared in the 1972 Act is to restore and maintain the chemical, physical, and biological integrity of the nation's water. That objective was accompanied by statutory goals to eliminate the discharge of pollutants into navigable waters by 1985 and to attain, wherever possible, waters deemed "fishable and swimmable" by 1983. While those goals have not yet been achieved, considerable progress has been made, especially in controlling conventional pollutants (suspended solids, bacteria, and oxygen-consuming materials) discharged by industries and municipal sewage treatment plants. Nearly 75% of assessed waters comply with standards for these pollutants. Progress has been mixed in controlling discharges of toxic pollutants (heavy metals, inorganic and organic chemicals), which are more numerous and can harm human health and the environment even when present in minute amounts -- at the parts-per-billion level. Moreover, efforts to control pollution from diffuse sources (rainfall runoff, for example) have only recently begun.

In 1987 Congress passed major amendments, the first comprehensive revision to the law in a decade (P.L. 100-4). (For further information, see CRS Issue Brief 89102, Water Quality: Implementing the Clean Water Act.) Authorizations for a number of the provisions expired in FY1990 and FY1991, for programs such as general grant assistance to states, research, and general EPA support. Authorizations for wastewater treatment assistance expired in FY1994. None of these programs lapsed, however, as Congress has continued to appropriate funds to implement the Act.

Legislative Activity after P.L. 100-4. The 102nd Congress (1991-1992) began the process of reauthorizing the Act with oversight and legislative hearings held by House and Senate subcommittees. Legislative activity resumed in the 103rd Congress. In May 1994 the Senate Environment and Public Works Committee reported a bill, S. 2093, but further Senate action stalled when it became clear that House committees would not act on a similar bill, H.R. 3948, due to controversies over a number of provisions in that legislation. In addition, three issues which emerged prominently in 1993, referred to as the regulatory relief agenda, affected consideration of the Clean Water Act and became integral to the debate on virtually every environmental bill. The three issues were unfunded federal mandates, private property "takings," and risk assessment.

Legislative Activity in the 104th Congress. In the 104th Congress, the Clean Water Act was one of the first environmental laws to receive congressional attention. A House Committee on Transportation and Infrastructure subcommittee began oversight hearings on clean water issues on Feb. 9, 1995, and concluded on March 9. Committee Chairman Shuster introduced a comprehensive reauthorization bill, H.R. 961, on February 15. This bill, including revisions based on testimony and comments received, was approved by the Water Resources and Environment Subcommittee on March 29, and by the full Committee on April 6 (H.Rept. 104-112). On May 16, 1995, the House passed H.R. 961 (240-185), after 5 days of debate. (For additional information, see CRS Report 95-427, Clean Water: Summary of H.R. 961, As Passed.)

H.R. 961 reflected efforts to make the CWA more flexible and less prescriptive and to address a number of regulatory relief issues of concern to many -- industries, states, and cities, in particular -- who have criticized what they view as excessive and prescriptive clean water regulation. These reform efforts were evident in the bill's amendments to the standards and regulatory requirements and wetlands permit provisions of current law. The legislation was endorsed by a number of industry groups, as well as state and local government groups, but was opposed by environmental groups and the Clinton Administration. EPA officials said that the bill would undermine the existing framework for protection of U.S. waters.

Subsequently the House also passed two separate measures that were similar to provisions of H.R. 961. One bill, H.R. 1943, would have provided a waiver from secondary treatment requirements for a wastewater treatment plant in San Diego. The second, H.R. 2567, dealt with water quality standards for constructed water conveyances such as ditches or canals. The Senate did not consider either bill.

In the Senate, reauthorization legislation was not introduced, and no hearings on H.R. 961 were held. However, a Senate Environment and Public Works subcommittee held three hearings in 1995 on S. 851, legislation to revise the CWA Section 404 dredge and fill permit program that was similar to wetlands reforms included in H.R. 961, and a single hearing on wetlands mitigation banking issues in 1996. In December 1995, the Committee held a hearing on CWA issues affecting municipalities, including funding and implementation of regulatory programs to manage stormwater and combined sewer overflows.

The 105th Congress. Congressional committees did not undertake any legislative activity on clean water issues in the 105th Congress, and no comprehensive reauthorization legislation was introduced. During the first session, committees that have jurisdiction over the Act (Senate Environment and Public Works and House Transportation and Infrastructure) gave priority to two other bills, reauthorization of Superfund and the Intermodal Surface Transportation Efficiency Act (ISTEA). However, on April 23, 1997, the House Transportation and Infrastructure Subcommittee on Water Resources and Environment began oversight hearings on issues that could assist in developing reauthorization legislation. That hearing, concerning clean water and drinking water infrastructure needs, was followed by an April 29, 1997, hearing on regulatory and judicial developments affecting wetlands (see discussion below, "Wetlands"). A Senate subcommittee held a similar hearing on wetlands issues in June 1997. Senate committee aides said that the focus of attention in the Senate, when it occurs, is likely to be on drafting a narrow reauthorization bill that addresses areas where consensus and streamlining are possible.

While comprehensive legislation did not received attention, one bill that would amend two parts of the Act passed the House passed in November 1997. H.R. 2207 (H.Rept. 105-237) would amend Section 301(h) to allow the wastewater treatment plant in Mayaguez, Puerto Rico, to apply for a waiver from the Act's requirement for secondary treatment of wastewater discharges. Under current law, EPA may not accept new applications under Section 301(h), which concerns secondary treatment waivers for marine discharges; waivers, when allowed, are based on stringent environmental criteria and case-by-case reviews. H.R. 2207 also would expand use of grant funds under the National Estuary Program to include implementation of estuary management plans. The Senate did not take up H.R. 2207, but in October 1998, it did pass S. 1222 (S.Rept. 105-273), a bill providing for restoration of estuarine habitats, expanding use of National Estuary Program grant funds, and also revising provisions of the Act to extend the Chesapeake Bay Program. The House did not consider S. 1222.

Funding Municipal Wastewater Treatment

The Act's program of financial aid for municipal wastewater treatment plant construction is a central feature of the law. Since 1972 Congress has provided $69 billion to assist cities in achieving requirements for secondary treatment of municipal sewage (equivalent to 85% reduction of wastes), or higher where required by local water quality conditions. State and local governments have spent more than $25 billion of their own funds, as well. Nevertheless, 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).

The 1987 amendments initiated a program of grants to capitalize State Water Pollution Control Revolving Funds (SRFs), or loan programs. This new Title VI program replaced the previous categorical grants program, under which the federal share was 55% of project costs and localities were not obligated to repay federal funds that they received. Under the revolving fund concept, monies used for construction will be repaid by loan recipients to the states, to be recycled for future construction in other communities, thus providing an ongoing source of financing. States are required to deposit a 20% match of the federal amount. The intent of the 1987 amendments was that federal contributions to SRFs would assist in making a transition to full state and local financing by FY1995. The essential tradeoff embodied in these provisions was that states would have greater flexibility to set priorities and administer funding in exchange for an end to federal aid after FY1994. (For additional information, see CRS Report 98-323, Wastewater Treatment: Overview and Background.)

All states have established the legal and procedural mechanisms to administer the new loan programs and are now eligible to receive SRF capitalization funds under Title VI. Some with prior experience using similar financing programs moved quickly, while others had difficulty in making a transition from the previous grants program to one that requires greater financial management expertise for all concerned. Moreover, many states have complained that the SRF program is unduly complicated by federal rules -- some contained in the statute, others in EPA guidance -- even though states were intended to have greater flexibility. Congressional oversight since 1987 has examined the status of state assumption of the new financing program and progress towards reducing the backlog of wastewater treatment facilities needed to achieve the Act's water quality objectives.

Small communities and states with large rural populations have experienced the largest share of problems with the SRF program. Many small towns did not participate in the previous grants program and consequently are likely to require major projects to achieve compliance with the law. Yet these communities often lack an industrial tax base and thus face the prospect of very high per capita user fees, if their citizens are required to repay the full capital cost of sewage treatment projects. (For additional information, see CRS Report 98-64, Rural Water Supply and Sewer Systems: Background Information.)

The General Accounting Office has identified several factors affecting states' ability to lend their SRF funds, including (1) lack of experience in some states in managing such programs; (2) financial factors, such as the inability of small communities to afford SRF loans, and the ability of larger cities to borrow at lower rates directly from the bond market; and (3) various state-specific factors. Some Members of Congress have expressed concern that states have been unable to make loans fast enough to keep pace with congressional appropriations, leading to suggestions that the SRF program should be restricted. States are strong supporters of the SRF program and contend that inexperience plus other factors, such as resistance by some communities to the shift from grants to a loan program, contributed to initial delays in some states.

Difficulties that some states and, particularly, small communities have had, coupled with the large financing needs that remain, have made wastewater treatment funding a priority issue during reauthorization. Funding provisions are a significant aspect of the CWA as a whole and are of great interest to many stakeholder groups. During recent debates, these provisions have been less controversial than other clean water programs, because of general agreement on the need to extend funding assistance and address small community concerns. Greater controversy has arisen during Congress' annual budget and appropriations process, where funding for wastewater infrastructure competes with the need and desire to support other national programs.

In April 1997, the House Transportation and Infrastructure Subcommittee on Water Resources and Environment held an oversight hearing on clean water and drinking water infrastructure needs. The subcommittee heard testimony on funding needs for wastewater and drinking water infrastructure projects, with witnesses suggesting that current federal assistance is inadequate and that this is leading to significant burdens on local taxpayers. (Background information and testimony from this hearing is available via http://www.house.gov/transportation/water/wrhearin/4-23-97/423.htm)

Wet Weather Issues

The Clean Water Act has traditionally not distinguished between water pollution that occurs under dry or wet conditions. Regulatory programs have generally been concerned with limiting the potential environmental harm from highly concentrated pollutants under low-flow conditions. Thus, controls on industrial waste discharges are based on restricting the concentration of pollutants, regardless of the volume of wastewater. More recently, however, policymakers have recognized that many of the nation's remaining water pollution problems are distinctly related to rainfall events, and these problems are receiving special attention.

EPA's and states' biennial water quality inventories have identified wet weather flows (including agricultural runoff, urban stormwater, and sewer overflows) as the largest remaining threat to water quality. Consequently, EPA's clean water program is now focusing to a large extent on solving wet weather pollution problems. In doing so, EPA is expanding its traditional regulatory approach, which focused on controlling industrial and municipal pollution sources. Many of EPA's current water quality initiatives concerning wet weather pollution start 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 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.

In the context of CWA reauthorization, some see the watershed concept as a means of providing a geographic focus to pollution problems (rather than a focus on individual point sources, as in the past), encouraging consideration and prioritizing of all contaminant sources in the relevant geographic area, and addressing a wider range of water quality problems such as habitat degradation and total health of aquatic ecosystems. At issue is how the broad watershed approach can be integrated into programs in the existing law.

Nonpoint source pollution. Nonpoint source pollution is diffuse runoff of pollutants from farm lands, forests, city streets, construction sites, mines, and other areas. As the more traditional point sources of pollution (from industry and sewage treatment plants) are controlled, nonpoint source pollution represents a larger and more pervasive portion of total water quality problems. EPA estimates that nonpoint sources are responsible for more than 50% of water quality standard violations and that agricultural sources contribute 80% of the violations from nonpoint sources. Pollutants vary widely and include sediments and other conventional (e.g., nutrients) and toxic wastes that degrade water quality.

The 1987 amendments established the first comprehensive program to address this aspect of water pollution problems in a new Section 319 of the Act. While the Act previously had provided for state and regional planning to address all sources and types of pollution, nonpoint sources have been viewed as so diverse and site-specific that they are not amenable to national standards or controls. Moreover, controlling nonpoint sources typically requires controlling individual actions associated with land use, decisions generally made by state and local governments. Nonpoint source controls are difficult because the diffuse and intermittent nature of the sources makes it hard to quantify individual contributions and because regulatory authority for implementing and enforcing controls relies on local authority. Nevertheless, Section 319 reflects a widespread recognition that failure to manage nonpoint sources will prevent achieving the nation's overall water quality objectives.

Section 319 consists of three elements. First, states were required to assess the extent of nonpoint source-related water quality impairments. Second, they were to develop and implement plans for managing nonpoint sources. Third, Section 319 authorized $400 million in grants to states for plan implementation. After several years of implementing the 319 program, EPA and states began discussions on how to make administrative changes that would result in more effective control of nonpoint source pollution. EPA wanted states to review and revise their programs to achieve specific elements and goals, while states desired more flexibility and relief from oversight. In May 1996, EPA issued revised program guidance, based on negotiations with states, that is intended to streamline the 319 program and to make it more effective and responsive. States that meet criteria in the guidance can be designated as leadership or Tier I states, making them eligible for incentives such as multi-year grants, reduced reporting, and self-assessment by states themselves.

Congress has been reviewing the adequacy of EPA and state activity to implement Section 319 and the possible need for program modification. Several legislative issues have been considered, including funding, whether to move beyond the voluntary approach now found in Section 319, and, if so, how to strike a balance between compliance incentives and control requirements in law or regulation. At issue is whether and how to establish programs in the CWA with minimum standards to ensure that progress towards water quality goals continues, while providing sufficient state and local flexibility and incentives for landowners to manage polluted runoff.