Clean Water:
Summary of H.R. 961, As Passed

Claudia Copeland
Specialist in Environmental Policy
Environment and Natural Resources Policy Division

Updated May 30, 1995
95-427 ENR

SUMMARY

H.R. 961, a bill to reauthorize the Clean Water Act, was approved by the House of Representatives on May 16 by a 240-185 vote. This report summarizes the bill as passed.

The Clean Water Act, which was last amended in 1987, 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. It has been viewed as one of the Nation's most successful environmental laws in terms of achieving the statutory goals, which have been widely supported by interest groups and the public. In the past, congressional efforts to amend the Act have dealt with all aspects of the law, with the objective of strengthening water quality programs. H.R. 961 reflects efforts to make the CWA more flexible and less prescriptive and to address a number of regulatory reform issues of concern to many of those regulated by the law -- industries, States and cities, in particular. These reform efforts are particularly evident in titles III and VIII of the bill, amendments to the standards and regulatory requirements and wetlands permit provisions of current law. The bill also provides program authority and funding for Fiscal Years 1996 through 2000.

H.R. 961 consists of ten titles:

• Title I, Research and Related Programs (CWA title I)
• Title II, Construction Grants (CWA title II)
• Title III, Standards and Enforcement (CWA title III)
• Title IV, Permits and Licenses (CWA title IV)
• Title V, General Provisions (CWA title V)
• Title VI, State Water Pollution Control Revolving Funds (CWA title VI)
• Title VII, Miscellaneous Provisions
• Title VIII, Wetlands Conservation and Management (CWA section 404)
• Title IX, Navigational Dredging (amending the Marine Protection, Research, and Sanctuaries Act)
• Title X, Additional Provisions

Interest groups including the National League of Cities, the U.S. Chamber of Commerce, National Association of Realtors, Chemical Manufacturers' Association, and the National Utility Contractors Association, plus many State and local government groups endorsed H.R. 961. The Clinton Administration and environmental groups, on the other hand, are strongly critical of the legislation, saying it would weaken water quality gains made so far. Future prospects are unclear, as the Senate has not taken up the Clean Water Act.

CONTENTS

INTRODUCTION

REGULATORY REFORM PROVISIONS
Unfunded Mandates
Cost-Benefit Analysis and Risk Assessment
Private Property Takings

SUMMARY OF H.R. 961
TITLE I, RESEARCH AND RELATED PROGRAMS
TITLE II, CONSTRUCTION GRANTS
TITLE III, STANDARDS AND ENFORCEMENT
Water Quality Criteria and Standards
Nonpoint Source Pollution Management
Watershed Management
Stormwater Management
Risk Assessment and Cost-Benefit Analysis
TITLE IV, PERMITS AND LICENSES
TITLE V, GENERAL PROVISIONS
TITLE VI, STATE WATER POLLUTION CONTROL REVOLVING FUNDS
TITLE VII, MISCELLANEOUS PROVISIONS
TITLE VIII, WETLANDS CONSERVATION AND MANAGEMENT
Compensation Classification and Permit Procedures
TITLE IX, NAVIGATIONAL DREDGING
TITLE X, ADDITIONAL PROVISIONS

Table 1. SRF Capitalization Grant Allotment under H.R. 961

Clean Water: Summary of H.R. 961, As Passed

INTRODUCTION

H.R. 961, a bill to reauthorize the Clean Water Act, was approved by the House of Representatives on May 16 by a 240-185 vote. On final passage, 45 Democrats joined Republicans in support of the bill, while 34 House Republicans joined minority Democrats and one Independent in voting against the bill.

The Clean Water Act (CWA) was last amended in 1987 (P.L. 100-4). Authorizations under those amendments, including for wastewater treatment grants to States, have expired, leading to recent congressional efforts to revise and extend the law. In the 103rd Congress, the Senate Environment and Public Works Committee reported a comprehensive reauthorization bill, S. 2093, but Senate committee leaders did not bring the bill to the Senate floor when it became clear that legislation in the House was stalled. In the House, similar legislation was introduced (H.R. 3948), but due to controversies over a number of provisions in the bill, the House Public Works and Transportation Committee did not take up the bill before the 103rd Congress adjourned.

As introduced in February, H.R. 961 was based in large part on a CWA reauthorization proposal from the 103rd Congress that was not introduced then but was presented as an alternative to H.R. 3948. Many elements of the 103rd Congress' alternative proposal, which had been drafted by Representative Bud Shuster and others, were drawn from H.R. 3948, and some of these were carried forward into H.R. 961. Many other elements of H.R. 961, however, are new. During subcommittee markup on March 29 and full committee markup on April 4-6, approximately 30 amendments including two sets of chairman's en bloc amendments were approved (H.Rept. 104-112). Several amendments designed to maintain or strengthen existing programs were rejected.

The Clean Water Act 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. It has been viewed as one of the Nation's most successful environmental laws in terms of achieving the statutory goals, which have been widely supported by interest groups and the public. In the past, congressional efforts to amend the Act have dealt with all aspects of the law, with the objective of strengthening water quality programs.

H.R. 961 reflects efforts to make the CWA more flexible and less prescriptive and to address a number of regulatory reform issues of concern to many of those regulated by the law -- industries, States, and cities, in particular. These reform efforts are most evident in titles III and VIII of the bill, amendments to the standards and regulatory requirements and wetlands permit provisions of current law. The legislation is designed in large part to provide relief to businesses, States, local governments, and individual landowners from what many in these groups view as excessive and prescriptive clean water regulation. It does so particularly by incorporating risk assessment and elevating cost considerations in the implementation of CWA programs.

H.R. 961 consists of ten titles:
• Title I, Research and Related Programs (CWA title I)
• Title II, Construction Grants (CWA title II)
• Title III, Standards and Enforcement (CWA title III)
• Title IV, Permits and Licenses (CWA title IV)
• Title V, General Provisions (CWA title V)
• Title VI, State Water Pollution Control Revolving Funds (CWA title VI)
• Title VII, Miscellaneous Provisions
• Title VIII, Wetlands Conservation and Management (CWA section 404)
• Title IX, Navigational Dredging (amending the Marine Protection, Research, and Sanctuaries Act)
• Title X, Additional Provisions

The bill provides program authority for Fiscal Years 1996 through 2000.

During five days of floor debate, the House adopted 16 amendments to the committee-reported bill, including a set of en bloc technical and clarifying amendments. Several of the amendments adopted were significant.

• A Boehlert amendment that modified a provision in the committee bill that would have repealed a program under the Coastal Zone Act Reauthorization Amendments (CZARA) requiring coastal States to develop enforceable nonpoint source control programs. The Boehlert amendment modified existing CZARA requirements, giving States additional compliance time. The House also adopted a Petri amendment giving EPA the lead role in administering the CZARA program (now shared by EPA and NOAA) and allowing coastal States the option to choose participation in the CZARA or CWA section 319 nonpoint program.
• A Largent amendment to reduce the bill's authorized funding for State Revolving Fund (SRF) capitalization grants from a 5-year total of $15 billion to $11.45 billion ($2.25 billion in FY 1996 and $2.3 billion annually thereafter). It eliminated a provision in the committee bill that would have established a $500-million-per-year SRF for nonpoint pollution control. The Largent amendment conformed the bill's funding to amounts contained in H.Con. Res. 67, the FY 1996 budget resolution (approved by the House May 18).
• A Lipinski amendment providing a new State-by-State allotment formula for distribution of SRF capitalization grants.
• A Laughlin amendment providing that the Act's State certification procedures do not apply with respect to Federal licensing of hydroelectric facilities if the certification would be inconsistent with the Federal Power Act. The amendment also sets up a mechanism to resolve any disputes over inconsistent State actions, the process to be run by the Federal licensing agency.

The House also rejected 20 amendments offered by Democrats and Republicans intended to modify a number of the most controversial features of the committee bill. The rejected amendments dealt with issues such as enforcement, water quality standards and State standard setting, classification and delineation of wetlands, property owner compensation under the wetlands title of the bill, stormwater permitting, and risk assessment and cost-benefit analysis.

Interest groups including the National League of Cities, the U.S. Chamber of Commerce, National Association of Realtors, Chemical Manufacturers' Association, and the National Utility Contractors Association endorsed H.R. 961. These groups and others, representing States, agriculture interests, and additional industries, were involved in a series of task forces convened by Chairman Shuster to provide comments on various CWA issues.

Environmental groups, which were not included in the task forces, criticized both the substance of the legislation and the process used to redraft it following subcommittee hearings in February and March. Carol Browner, Administrator of the Environmental Protection Agency (EPA), also criticized the bill, asserting that it would be unworkable and that by loosening current requirements, it would make enforcement difficult "against even egregious polluters." Other EPA officials said that the bill contains loopholes that would undermine the existing framework for protection of U.S. waters.

Legislative activity has not begun in the Senate. According to Senate Environment and Public Works Committee Chairman John Chafee, Senate committee staff will begin drafting a CWA reauthorization bill this summer. Senator Chafee has said that his bill will address a relatively narrow range of issues, including funding, stormwater permitting, nonpoint source pollution and watershed planning, and wetlands, because, overall, he believes the current CWA works well.

REGULATORY REFORM PROVISIONS

Consistent with other legislative efforts of the Republican majorities in the 104th Congress, including elements of the House Republican Contract with America, H.R. 96 l contains regulatory reform provisions intended to respond to specific public concerns over unfunded Federal mandates, risk assessment and cost-benefit analysis, and regulatory actions which result in private property takings.

Unfunded Mandates

H.R. 961 authorizes increased funding for some core programs. For example, capitalization grants for State Revolving Funds (title VI of the Act) would be authorized at a total of $11.45 billion through FY 2000 ($2.25 billion in FY 1996 and $2.3 billion annually thereafter), compared with appropriated funds in FY 1995 of $1.235 billion and the Administration's FY 1996 request for $1.6 billion. In addition, H.R. 961 authorizes increased funds for grants to assist State management of water quality programs (CWA section 106), increased from $75 million under current law to $150 million per year.

However, the bill does not authorize funding for all programs likely to be viewed as mandates by States. While it authorizes increased funding to plan, develop and implement section 319, State nonpoint pollution management programs (a total of $1 billion would be authorized for section 319 grants), it authorizes no substantial funding for new section 322, State stormwater management programs, which is modeled after section 319. Also, no funds are authorized to assist States which seek delegation of the section 404 wetlands regulatory program; although 404 delegation is voluntary, not a mandate per se, lack of such funding has been cited by States as one factor causing many to not seek delegation in the past.

Two provisions of H.R.961 provide for explicit linkage between funding and compliance with nonpoint source and stormwater requirements. The two provisions state that in any fiscal year when appropriated funds are less than authorized amounts, the deadline for compliance with the section shall be postponed by one year. The specific provisions concern State nonpoint source pollution management programs (new CWA section 319(p), but an extension would not apply if EPA and the State certify that funding is adequate) and State stormwater management programs (new section 322(h) would link funding to progress in attaining water quality standards). The bill contains no overall language, however, that would tie compliance in general to the availability of Federal funds (referred to by some as "no money-no mandate").

The 104th Congress has already passed legislation that broadly addresses unfunded mandates. Public Law 104-4 (S. 1) is intended to make Congress more aware of the costs imposed by legislation on States, cities, and the private sector. It requires the Senate and House to take a separate, majority vote in order to pass any bill that would impose unfunded mandates of more than $50 million on States and cities or more than $100 million on the private sector. One provision of the new law, an amendment offered by Senator Robert C. Byrd, would require Congress to use certain expedited procedures if it is notified during a fiscal year that a mandate is underfunded. If Congress fails to take action within 60 days, the mandate would be eliminated. The requirements and procedures of P.L. 104-4 are likely to bear on future consideration of H.R. 961 and, if enacted, its implementation.

Cost-Benefit Analysis and Risk Assessment

Particularly in its amendments to regulatory requirements and standards provisions of the CWA, H.R. 961 seeks to insert greater consideration of cost in the implementation of the law. In general, the issue is whether EPA should be expressly required to conduct cost-benefit analysis and risk assessment in developing regulations or in setting regulatory priorities.

Several current law provisions do provide for consideration of costs, notably EPA's issuance of effluent limitations for categories of industrial point sources. The Act requires EPA to evaluate a range of factors including cost, production process and process changes, and non-water quality environmental impact (including energy requirements) when issuing standards for existing and new industrial sources. Further, current law gives some opportunities to modify permit requirements where costs bear no reasonable relationship to benefits.

The bill would add cost considerations to the adoption of State water quality standards. Current law does not expressly include analysis of cost or cost effectiveness of water quality standards. These standards establish designated uses and overall pollutant limits for a waterbody. Once established, they are used by EPA or States to impose specific requirements on dischargers through permits. The bill would modify current law to permit States to consider the benefits of attaining a water quality standard and its cost effectiveness. The bill also would require EPA when issuing water quality criteria, the numeric elements incorporated in most State water quality standards, to estimate the costs of complying with the criteria. No water quality standard could be issued by EPA for a State where the costs of attaining the standards are not reasonably related to anticipated benefits. Finally, the bill would make it easier for States to revise the designated use of a waterbody if the benefits of achieving a designation do not justify the costs.

In addition, the bill would make risk assessment a much more prominent, even overriding, element of CWA decisionmaking. Risk assessment per se is not mandated by the current law, but many of its provisions regarding water quality criteria and standard setting for toxic pollutants require EPA to evaluate a range of factors which EPA officials and others view as broadly reflecting risk assessment. For example, CWA section 307(a) requires EPA, when issuing an effluent standard for toxic pollutants, to

...take into account the toxicity of the pollutant, its persistence, degradability, the usual or potential presence of the affected organisms in any waters, the importance of the affected organisms and the nature and extent of the effect of the toxic pollutant on such organisms, and the extent to which effective control is being or may be achieved under other regulatory authority.

Title III would revise the section 307(a) factors and in doing so would add evaluation of the availability and risk of substitute chemicals or control technologies, "the beneficial and adverse social and economic effects of the effluent standard," and impact on national security interests.

More broadly, however, H.R.961 would add comprehensive risk assessment and cost-benefit analysis before issuing standards, effluent limitations, other regulatory requirements, or guidance under the CWA. Risk assessment also would be required before issuance of water quality criteria and water quality based standards.

While the precise language in these two sections is not identical to that in other risk assessment and cost-benefit legislation introduced in the 104th Congress (such as that in division C and division D of H.R. 9, as passed by the House February 28), it is similar to many of the concepts and principles found in the broader legislation. (l) In terms of the CWA, however, these provisions of H.R. 961 would elevate risk and cost-benefit considerations over other decision criteria now specified in the law. Moreover, several provisions of H.R. 961 go beyond those in the other legislation already passed by the House, including provisions in H.R. 961 requiring EPA to conduct comparative risk analysis, to analyze existing as well as prospective regulations (a "look back" rule), and to ensure that water quality regulations maximize net benefits (not just that costs are reasonably related to benefits). During floor debate on the bill, the House rejected an amendment intended to conform these provisions of H.R. 961 with those in H.R. 9.

EPA would be prohibited from issuing any standard, effluent limitation, other regulatory requirement, or guidance under the Act without a certification that it "maximizes net benefits to society" and is "economically achievable". Since 1972 the Act's general statutory approach for regulating pollution from industrial sources is that dischargers are to meet technology-based performance standards contained in effluent limitation guidelines issued by EPA. These effluent limitations have required industry to meet progressively more stringent standards--the best practicable control technology currently available (BPT) and best available technology economically achievable (BAT)--which have been the principal mechanisms for setting pollution control levels. The provisions of H.R. 961 would place new emphasis on risk, relative risk, costs, and net benefits on virtually all CWA regulatory actions.

Private Property Takings

The CWA's section 404 wetland permit program has been a flashpoint for many of those concerned over Federal regulatory actions considered to infringe on property rights and diminish the value of private property holdings. Much of the concern stems from the fact that an estimated 75 percent of wetlands in the United States are located on private property.

Title VIII of H.R. 961 addresses this issue directly with new requirements that the Federal Government shall compensate individuals if a Federal agency action under section 404 diminishes the fair market value of any portion of the property by 20 percent or more. Compensation is to be for an amount equivalent to the diminution in value. If the diminution is more than 50 percent, the Federal Government is to buy the affected portion of the property. These provisions in the bill are substantially similar to that in legislation passed by the House concerning private property owner compensation (division B of H.R. 9).

Title VIII also includes general language directing that, in carrying out section 404, all Federal agencies shall seek to "minimize the adverse effects of the regulatory program under this section on the use and value of privately owned property." Likewise, it directs that section 404 be implemented in a manner so as to "balance the objective of conserving functioning wetlands with the objective of ensuring continued economic growth, providing essential infrastructure, maintaining strong State and local tax bases, and protecting against the diminishment of the use and value of privately owned property."

SUMMARY OF H.R. 961

TITLE I, RESEARCH AND RELATED PROGRAMS

Title I concerns research and related programs and authorizations for some core programs in the Act. H.R. 961 adds goal and policy statements concerning support for State water pollution prevention and control efforts, and support for wastewater reclamation, beneficial reuse of wastewater, and water use efficiency. A new policy statement provides that implementation of CWA programs should produce benefits which justify their costs and should be based on scientifically objective and unbiased information concerning risk.

Grants under section 106 of the Act, assistance to State water quality management programs, are reauthorized through FY 2000 at $150 million per year. (Authorized funding in current law is $75 million; recent appropriated funding has been $80 million per year.)

New grant funds authorized by title I would provide technical assistance and training to rural and small publicly owned treatment works on compliance, as well as planning, construction and operation of treatment works and would additionally provide grants to States to assist with planning, design and construction of treatment works in rural communities of less than 3,000 persons that are severely economically disadvantaged; $10 million per year is authorized.

Language is added directing EPA to conduct a demonstration program on measures to control acidic and other toxic mine drainage affected by past coal mining practices. Fifty percent Federal cost-sharing is authorized.

In addition, title I authorizes new grant assistance for sanitation facilities in rural and Native Alaska villages ($25 million per year) and reauthorizes Chesapeake Bay programs ($18 million per year, under CWA section 117) and Great Lakes programs ($17.5 million per year, under CWA section 118). Great Lakes research is reauthorized, including programs concerning contaminated sediment remediation, and a Great Lakes Research Council is established to promote coordination of Federal research.

The bill also amends section 118 to specify that States' water quality standards, policies, and procedures shall be considered consistent with EPA guidance implementing section 118 if based on scientifically defensible judgements which provide an overall level of protection comparable to that in the EPA guidance. (This language replaced a provision in an earlier version of H.R. 961 which would have declared the Great Lakes Water Quality Initiative recently issued by EPA to be guidance which States may but are not required to follow. The Great Lakes Water Quality Initiative is intended to control toxic pollutants on a lakes-wide coordinated basis by requiring States to adopt new criteria and standards. Details and cost of the Initiative have been very controversial.) The provision in the bill as passed is a compromise between those who wanted to make compliance with the guidance voluntary and those who wanted to retain current law which requires States to comply with the EPA guidance.

TITLE II, CONSTRUCTION GRANTS

Title II provides certain technical amendments to the construction grants provisions of the Act, title II, concerning assistance for construction of municipal wastewater treatment plants. In 1987 amendments the direct grant assistance provisions of CWA title II were superseded by revolving loan fund provisions of CWA title VI, but many of the regulatory requirements and project eligibility definitions of CWA title II continue to apply to projects funded under title VI. Current limitations on the use of Federal funds are modified by H.R. 961 to remove limits on eligible project categories, allow use of funds for control of nonpoint sources of pollution, and remove restriction on the use of title VI funds for collector sewer and combined sewer overflow projects. A new requirement for consideration of water use efficiency options in wastewater projects is added. EPA is authorized to negotiate an annual budget with a State for the purpose of administering closeout of projects funded under CWA title II.

Current language regarding sewage collections systems is modified to update "existing collection system" to mean a system existing upon enactment of this legislation. The definition of "treatment works" is amended to include acquisition of lands and interest in lands which are necessary for construction of a treatment works. (Current law does not permit use of Federal funds for land acquisition, unless the land is integral to the treatment process.)

The bill also authorizes title II grant funds ($300 million in FY 1996) to assist small communities (less than 75,000 population) with construction of wastewater treatment works and to assist economically disadvantaged or hardship coastal localities. The Federal share of such grants is to be 80 percent of construction costs. Funds would only be available if appropriated funds for title VI in FY 1996 are at least $2.25 billion. In addition, specific assistance is authorized for New Orleans ($10 million) and Bristol County, Massachusetts ($3 million).

Current law requires that projects of certain size undergo value engineering review prior to construction by independent professionals to ensure that the most cost-effective plans and design have been used. H.R. 961 raises the limit on value engineering requirements from $10 million to $25 million.

TITLE III, STANDARDS AND ENFORCEMENT

Title III amends CWA title III, concerning standards, regulation, and enforcement. This title and title VIII reflect the most substantive and controversial amendments that are contained in H.R. 961.

Several sections in this title would allow for modification of industrial point source discharge requirements or permit limitations. For example, the bill provides new authority for discharge permits to be modified if the facility undertakes pollution prevention programs which will achieve an overall reduction in environmental releases (to air and land, as well as water). Another provision authorizes modification of permit requirements concerning conventional or toxic pollutants to allow for trading of pollution reduction requirements between sources. Permit modifications would not be allowed if the action would result in water quality standards violations or failure to attain water quality standards, or would interfere with the operation of a publicly owned sewage treatment works. Further, where the modified discharge would affect waters within the jurisdiction of two or more States, notice to neighboring States is required, and the neighboring State may modify or veto the permit.

Section 301(k) of current law authorizes EPA to modify regulatory requirements for industrial facilities which utilize innovative technologies. H.R. 961 expands the factors for considering a 301(k) waiver and extends compliance for such facilities from two years to three years.

The bill includes potential for modifying CWA requirements imposed on industrial facilities whose wastes are treated by municipal wastewater treatment plants. These facilities are required by current law to pretreat wastes before discharging to the municipal system. H.R. 961 would permit the locality to impose local requirements, in lieu of national pretreatment standards, so as to eliminate unnecessary or redundant mandates. Both the treatment works and the industrial facility must be in compliance with other applicable standards before local limits may be substituted. In addition, the bill would allow for modified requirements and permit extensions in the case of industrial facilities proposing to use innovative pretreatment processes. The bill would allow industrial facilities such as photoprocessing companies which discharge silver wastes to municipal plants to utilize a code of management practices in lieu of pretreatment requirements and also would allow for related modification of the treatment works' discharge permit.

Title III provides some modifications for municipal dischargers, as well. Current law requires that municipal wastewater treatment plants provide, at a minimum, secondary treatment of sewage. More stringent treatment can be required where necessary to meet local water quality standards. The bill would allow modified permit requirements for municipal treatment plants serving communities of 10,000 or fewer persons which treat waste primarily from domestic users and utilize alternative systems (such as constructed wetlands) or are equivalent to secondary treatment. One industry group estimated that this provision would permit as many as 12,000 municipalities (including many now in compliance with the law) to obtain secondary treatment waivers. Also, coastal municipal dischargers which meet certain conditions would be deemed to be achieving the Act's requirement for secondary treatment; this provision is intended to meet circumstances unique to San Diego, CA.

In addition, the bill includes an amendment authorizing coastal communities that discharge from treatment works into deep marine waters through an ocean outfall to apply for a 10-year waiver from secondary treatment requirements. This amendment revises current section 301(h) of the Act, concerning secondary treatment waivers for coastal communities and reopens the opportunity for coastal cities to apply for 301(h) waivers for a one-year period following enactment. The House adopted an amendment allowing a further modification of the 301(h) waiver currently held by Anchorage, AK, relieving it of a statutory requirement to meet a particular pollutant discharge limit specified for all communities with 301(h) waivers.

CWA section 311(j)(5) concerns response planning by owners or operators of certain tank vessels or facilities to prevent discharges of oil or hazardous substances. The bill clarifies that this provision of the law does not apply to facilities or municipal or industrial treatment works that store only de minimis quantities of oil or hazardous substances.

Title III contains limited amendments to enforcement provisions of current law. The bill provides that the amount of monetary penalties imposed under the CWA be modified at least every four years with an inflationary adjustment. Also, the bill modifies the Federal facilities provision of the CWA to make each department, agency or instrumentality of the Federal Government subject to all Federal, State, and local requirements concerning water pollution control. It also expressly waives sovereign immunity for Federal facilities concerning substantive or procedural requirements, administrative authority, sanctions, and imposition of reasonable service charges.

Title III reauthorizes the National Estuary Program (NEP), CWA section 320, at $19 million per year and expands use of grant funds to "implementation monitoring" as well as plan development. Charlotte Harbor, Florida, and Barnegat Bay, New Jersey, are added to the list of estuaries for priority consideration in the NEP.

Water Quality Criteria and Standards

Under current law States are required to review and, if necessary, revise water quality standards every three years. H.R. 961 would extend this to a five-year review. Language in current law concerning revision of designated uses of waters would be modified to allow for downgrading of nonattained uses in cases where achieving water quality to support a designated use results in disproportionate costs over benefits or attaining the designated use is infeasible. Downgrading of existing uses under some circumstances also is permitted by the bill. (2) The bill specifies that State water quality standards should protect human health and the environment and enhance water quality (earlier drafts of the bill said that such standards should provide for adequate protection of human health and the environment). In addition, H.R. 961 provides that no water quality standard is to be adopted by EPA for a State where costs are not reasonably related to the anticipated benefits. (Under current law, EPA is authorized to adopt standards for a State which fails to do so.)

Currently the CWA requires States to calculate a total maximum daily load (TMDL) for each waterbody that is not currently meeting applicable water quality standards and to allocate pollutant load reductions among all sources contributing to a standards violation. H.R. 961 provides States with greater flexibility to determine whether and when a TMDL is necessary and to consider anticipated load reductions (e.g., from future implementation of nonpoint or point source controls) when establishing TMDLs.

An additional element of State water quality standards is water quality criteria, which are numeric limitations on pollutant amounts which may be present in a river or stream which will support the designated use. They are based on criteria documents prepared by EPA which summarize the best available scientific information on the pollutants. The bill would modify current law to expand the factors considered by EPA when preparing water quality criteria and to require that EPA review and revise criteria on a more frequent basis than occurs now. When issuing water quality criteria, EPA would be required to estimate the costs of compliance.

EPA would be directed to publish guidance to States on the development and adoption of water quality standards applicable to ephemeral and effluent-dependent streams, or those in areas where navigable waters contain little or no water during low flow periods of the year. At issue is the concern of States in the arid west that the existing process of developing criteria and standards does not fully account for conditions where streams often are intermittent or depend on effluent from a point source to maintain flows.

CWA section 316(b) allows EPA to regulate the intake structures of powerplants to assure that such structures will not entrap or impinge aquatic species. Title III of H.R. 961 details factors to be considered by EPA when issuing regulations for cooling water intake structures.

New EPA guidance required under this title includes guidance to States concerns monitoring water quality at beaches and for issuing health advisories with respect to beach water quality. EPA is to consult with appropriate Federal, State, and local agencies when preparing this guidance. EPA also is directed to utilize protocols and methodology of the Food and Drug Administration when issuing any fish consumption advisories. EPA is directed to review and revise, as necessary, standards relating to sanitation devices from boats and other marine vessels to reflect improved technology. (Current regulations have not been revised since 1976.)

Nonpoint Source Pollution Management

Title III contains a number of amendments to section 319 of the Act, concerning management of nonpoint sources of pollution. Runoff from nonpoint sources such as farm fields, city streets, and constructions sites, is believed to account for more than one-half of all remaining pollution nationwide. In 1987 Congress established the first comprehensive program in the CWA to address nonpoint source pollution through State management programs utilizing technical and financial assistance from EPA.

Section 323 of the bill largely retains the current structure of section 319, while requiring that State management programs be updated and revised periodically. It modifies current language concerning management programs to clarify that voluntary or incentive-based approaches, as well as regulatory programs, enforceable policies and mechanisms, are allowable. The goal of a State management program under the bill's language is to provide for "reasonable further progress toward the goal of attaining water quality standards within 15 years of program approval". (Current law has no date specified and directs only that State programs are to improve water quality.) It requires States to resubmit management programs every 5 years, including documentation of the degree to which the State has achieved interim goals and milestones (taking into account adequacy of Federal funding under 319). The bill adds new language directing EPA, in the event a State fails to submit a management program, to prepare and implement one for the State. In the initial implementation of section 319, all States eventually submitted the required management program; this new provision would give EPA fallback authority, in the event that States did not do so in the future.

Title III would allow section 319 grants to be used for preparing reports and management programs as well as implementing approved programs (current law only addresses grants for implementation). It increases the share of a project which may be funded by grants from 60 to 75 percent. EPA is authorized to withhold grants if a State has not made satisfactory progress in its schedule. The bill mandates an EPA study on allocation of 319 funds.

H.R. 961 amends section 319 to provide that an agricultural producer who is implementing an approved voluntary whole farm or ranch natural resource management plan shall be deemed in compliance with a State nonpoint source management program. The intent of this provision is avoid duplicative requirements where producers are carrying out approved plans which consolidate numerous separate conservation and similar planning requirements.

Federal agencies that own or manage lands or license activities that cause nonpoint source pollution are directed to coordinate their nonpoint source control measures with States.

Section 319 grants funds would be increased (FY 1991 funds, the last authorized year, were $130 million) to $100 million in FY 1996 up to $300 million in FY 2000 (a total of $1 billion). Authorizations for groundwater projects would be increased from $7.5 million to $25 million per year. EPA is directed to issue guidance to identify economically achievable measures for controlling nonpoint source pollution which reflect application of best available practices, technologies, processes, siting criteria, operating methods or other alternatives.

The Coastal Zone Act Reauthorization Amendments of 1990 (CZARA, section 6217 of P.L. 101-508) requires coastal States to develop nonpoint source control programs that emphasize impacts of land use practices on coastal water quality and directs Federal agencies to provide specific guidance on measures or practices to limit nonpoint pollution. Coastal State groups have sought more flexibility to target CZARA control programs, more implementation time, and more funding; recent efforts by Federal agencies to address these issues through program changes have satisfied some of the States' concerns, but not all of them. Much of the objection to CZARA relates to its requirement that State programs shall include enforceable elements to control coastal nonpoint pollution.

H.R. 961 as reported would have repealed section 6217. During debate on the bill, the House adopted two amendments in this area. The first, a Boehlert amendment, deleted the repeal and modified section 6217 to give States additional compliance time and allowing conditional approval of State programs (to avoid possible funding sanctions). The House also adopted a Petri amendment giving EPA the lead role in administering the CZARA program (now shared by EPA and NOAA) and allowing coastal States the option to choose participation in the CZARA or CWA section 319 nonpoint program. (Also see discussion of title X of the bill, below.)

The bill would reverse a 1994 Federal circuit court ruling that land application of livestock manure from a concentrated animal feeding operation is a point source which is subject to permit and enforcement provisions of the CWA (Concerned Area Residents for the Environment v. Southview Farm, No 93-9229 ((2 Cir. Sept. 2, 1994))). The Supreme Court recently declined review of the Southview Farm case.

Watershed Management

Title III adds watershed management program language to the Act, new section 321. Watershed planning has recently been advocated by varied groups and the Administration as a new water quality management tool to supplement existing regulatory tools in the Act. It centers on the concept of using a broader, systems approach that considers all sources of pollution in a watershed in order to focus on the most important problems. Watershed planning is implicit in several existing planning and management provisions of the Act, but new section 321 would make the concept explicit. In simple terms, a watershed is a land area in which all of the rainfall or snowmelt drains toward a common point or waterbody such as a lake or stream. The bill authorizes and encourages States to participate in voluntary watershed management programs. Approved State programs would be eligible for certain CWA assistance for activities such as planning, developing and implementing water quality standards, and implementing practices to meet identified goals. No deadlines are specified.

Several incentives for approved State watershed programs are provided. The bill would allow trading or transfer of pollution control requirements between sources or dischargers in a watershed; issuance of modified permits with limitations that exceed water quality standards if the plan for the watershed includes assurance that standards will be met by a specified date; extension of permit terms for sources in a watershed management unit to synchronize permits with others; and application by States to EPA for multipurpose grants under several sections of CWA, thus giving the State flexibility to focus on priority activities within the watershed.

Stormwater Management

In 1987 Congress directed EPA to implement a specific permit program for stormwater discharges from industrial sources and municipalities. Many have criticized implementation of the permit program, particularly concerning applicability to small cities which have yet to be covered by regulations. (3) H.R. 961 adds new section 322 to the Act which would essentially convert the current stormwater permit program (section 402(p)) into a nonpoint source management-type program. It would define stormwater as a nonpoint source pollutant (because stormwater results from intermittent precipitation events and is thus more typical of nonpoint source pollution), repeal current CWA section 402(p), call for States to assess stormwater discharges and to prepare and submit a management program "for controlling pollution added from stormwater discharges to the navigable waters within the boundaries of the State." The goal is to attain water quality standards not later than 15 years after program approval. Critics objected to the stormwater provisions of H.R. 961, saying that while it would be appropriate to give States more flexibility in dealing with stormwater discharges, the bill would reduce water quality protection by relaxing stormwater pollution controls. Efforts to modify the stormwater provisions during House debate were rejected.

The State program in H.R. 961 is intended to include industrial and commercial as well as municipal stormwater sources and construction activities. (Many industrial and commercial sources are covered by current regulations and permits.) For industrial, commercial, oil, gas, and mining discharges, a State program is to provide incentives for implementing pollution prevention practices and eliminating exposure of stormwater to pollutants. The bill details a hierarchical framework, beginning with voluntary plans and proceeding to permits (general and site-specific) and enforceable measures, depending on whether stormwater at the facility does or does not have contact with equipment, raw materials, or waste products. Permits already issued under section 402(p) would remain in effect until the effective date of a State program. A source operating under a continued 402(p) permit would not be subject to citizen suits. Under H.R. 961, States would have full discretion to identify categories of industrial and commercial facilities, as well as municipalities, which would be subject to stormwater management programs. However, if a State fails to submit a report or program, EPA shall implement a program for the State.

For stormwater runoff from construction activities, States are to develop management programs consistent with current pollution prevention practice (many States have erosion and sediment control programs in pact), but are not required to duplicate the program for industrial and commercial discharges.

If a portion of a State's navigable waters is not meeting standards due to stormwater pollution from another State, the downstream State may petition EPA to convene a management conference for the purpose of developing an agreement among the States to reduce the level of pollution from stormwater and to improve water quality. (This procedure is reminiscent of enforcement conference procedures that existed in the CWA prior to 1972 which were replaced by the current compliance/enforcement provisions of the law).

The bill authorizes $20 million per year for State and local demonstration and research programs concerning stormwater, but it includes no general grant funds to develop and implement State management programs. States may use title VI (State Revolving Fund) monies to implement a stormwater program.

The legislation directs EPA to develop stormwater criteria which "shall be technologically and financially feasible and may include performance standards, guidelines, guidance, and model management practices and measures and treatment requirements." It also directs EPA to publish guidance identifying model management practices and measures which States may utilize in a State stormwater management program.

Risk Assessment and Cost-Benefit Analysis

Title III adds new provisions to the CWA concerning risk assessment (new section 323) and cost-benefit analysis (new section 324). These provisions would significantly expand attention to these factors in the CWA, which currently does not specifically address risk assessment but does provide for consideration of costs in several parts of the law, notably in EPA's issuance of effluent limitations for categories of industrial point sources and limited opportunities to modify permit requirements where costs bear no reasonable relations to benefits. The Act's standards provisions require EPA to evaluate a range of factors including cost, production process and process changes, and non-water quality environmental impact (including energy requirements).

Section 323 would require EPA to prepare risk assessments before issuing standards, effluent limitations, water quality criteria, CWA guidance, and other regulatory requirements under the Act. Permits or other procedural requirements would not be covered. The contents of such risk assessments are specified to include, among others, all readily obtainable data and information; discussion of significant assumptions or models used in the risk; measurement of the sensitivity of results; consideration and discussion of alternatives; to the maximum extent possible, description of the risk and quantitative estimates of uncertainty; and comparison to other risks to human health and the environment. When establishing a margin of safety as part of a regulatory requirement, EPA is to provide an explicit and quantitative description of the margin of safety relative to an unbiased estimate of the risk being addressed.

Section 324 would prohibit EPA from issuing any standard, effluent limitation, other regulatory requirement, or guidance under the CWA without a certification that it maximizes net benefits to society. This requirement is to supplement and, if there is conflict, supersede decision criteria otherwise applicable to such CWA actions.

EPA is to issue guidance on conducting benefit and cost analyses including identification of policy alternatives; estimates of the incremental benefits and costs; estimate of the nature and extent of the incremental risk avoided by the EPA action; and estimate of the total social, environmental and economic costs of implementing the action.

Certain actions are exempted from the cost-benefit requirement, including permit issuance, implementation of purely procedural requirements, and issuance of water quality criteria and water quality based standards (sections 304 and 303 of the CWA, respectively).

Risk assessment provisions and cost-benefit requirements under these two new sections would apply to EPA actions under the CWA as follows: between Feb. 15, 1995, and the first year after enactment of H.R. 961, they would apply to any of the covered standards or other requirements, or guidance issued under the CWA likely to result in annual increase in cost of $100 million or more. Thereafter, they would apply to any of the covered standards or other requirements regardless of cost and any guidance issued under the CWA likely to result in an increase in cost of $25 million or more.

TITLE IV, PERMITS AND LICENSES

Title IV contains amendments to permit provisions of CWA title IV (not including CWA section 404, which would be amended by title VIII of H.R. 961). Several of the proposed amendments would modify section 402 of the Act, the National Pollutant Discharge Elimination System, which is the principal permit section of the law. Under current law, section 402 permits are issued for terms no longer than five years. H.R. 961 would extend permits to 10 years. Ten-year permits have been proposed on a number of occasions in the past; at issue has been how to craft statutory language that would provide for some reopening of 10-year permits in the event of changed circumstances. The bill as passed authorizes permits to be modified in order to address a significant threat to human health and the environment.

The bill amends section 402 to clarify the scope of EPA's existing exemption for permitting certain waste treatment systems involving concentrated animal feeding operations and impoundments. (This provision relates to an amendment in title III to reverse a 1994 court decision concerning land application of livestock manure, discussed above.) Other clarifying amendments provide that when enforcing effluent limitations, authorities shall take into account the statistical basis on which the effluent limitation is based (for example, if the technology can only achieve 95 percent compliance, the permittee need only achieve 95 percent compliance).

Title IV of the bill adds provisions concerning overflows from combined stormwater and sanitary sewers (CSOs). Combined sewer overflow occurs when the designed capacity of the collection and treatment system is exceeded due to high volumes of rainwater or snowmelt. The problem affects approximately 1,100 cities, mostly in older cities in the Northeast, Midwest, and Far West. This type of pollution is diffuse and intermittent in nature, but can carry large amounts of raw sewage and industrial wastes which harm receiving waters.

The bill would codify the terms of a CSO control policy issued by EPA in April 1994. The policy requires cities to develop plans for CSO control meeting a design standard expressed as a number of overflows per year and assuring implementation of specified minimum management measures. EPA is authorized to issue CSO permits for a period up to 15 years (other section 402 permits are issued for 5-year terms; the bill proposes 10-year permits). Extensions are possible in cases where compliance costs are high. The bill further provides that, in the case of a CSO discharge affecting the States of New York and New Jersey, the other affected State may veto a permit extension. Existing consent decrees, administrative orders, or court orders concerning CSO discharges may be modified to extend to Dec. 31, 2009, but in the case of a discharge affecting New York and New Jersey waters, the other affected State may veto the extension.

A more recent issue of concern to some cities is problems of overflows from municipal separate sanitary sewers (SSOs) which are not CSOs and do not transport stormwater. No explicit control policy currently exists, and the scope of the SSO problem is not well known but is believed to be widespread. The impacts from overflows vary widely, and EPA recently convened a stakeholders' group to discuss how to address those overflows that pose the highest environmental and public health risk first. The bill directs EPA to develop a national control policy for SSOs and authorizes EPA to issue SSO permits for a period up to 15 years, with extensions being possible.

H.R. 961 makes some modification to provisions of the Act concerning permit programs administered by States under EPA delegation authority. The bill requires EPA to review administration of delegated programs once every three years and provides that EPA may object to issuance of a State permit if the proposed discharge presents "a substantial risk to human health and the environment" (current law provides for EPA veto if permit issuance is "outside the guidelines and requirements" of the Act).

Current law generally prohibits renewal or reissuance of a discharge permit with requirements less stringent than in an existing permit. H.R. 961 modifies this anti-backsliding language in the case of a publicly owned treatment works if the increase in pollutants results from conditions beyond the control of the facility and water quality standards of the receiving waters are not impaired.

The bill includes language on the subject of intake credits, which is not expressly addressed in the CWA. It would provide explicit statutory authority for what is now an administrative process whereby EPA or State permit writers adjust a discharger's effluent limitations to account for the background concentration of a pollutant in the discharger's intake water, enabling permittees to avoid extra treatment costs for background pollution. The bill would require that permit programs provide intake credits, which are allowed by many States but not all, for defined circumstances.

H.R. 961 directs EPA to issue regulations defining "waste treatment systems" but states that the term generally would not include areas used for detention, retention, treatment, settling, conveyance, or evaporation of wastewater, stormwater, or cooling water unless the area were open to the public (e.g., the area is used for recreational purposes or the owner allows the taking of fish or shellfish for sale). This amendment addresses concerns of some industries such as electric utilities that cooling ponds and similar facilities, if connected to navigable waters, may be subject to CWA regulation.

Title IV also requires EPA to issue guidance on the beneficial use of sewage sludge (known also as biosolids) and extends authorizations for studies and demonstration projects on biosolids, under section 405 of the CWA.

TITLE V, GENERAL PROVISIONS

Title V of H.R. 961 provides miscellaneous amendments to definitions and general provisions of the Act. It amends the definition of "publicly owned treatment works" to include privately owned facilities which, if they treat industrial wastes, are carrying out a pretreatment program which meets requirements of the Act. (This expanded definition could make some privately owned facilities eligible for assistance under the CWA; however, the bill also specifies that construction of a privately owned treatment works may be assisted only if the recipient of the assistance is a municipality.)

Title V provides language clarifying that the Federal Government may not use the CWA to supersede or otherwise impair the allocation of water quantity rights by States. This provision arises from persistent tensions and questions about controlling water quality under the CWA and allocating water quantity (generally reserved to the States). Separately, this title of the bill requires EPA to consult and substantively involve State and local governments in CWA decisionmaking and implementation. Language would be added to the Act to establish an independent Board of Audit Appeals to review and decide contested audit determinations related to grants and contract awards.

CWA section 401 requires that any applicant for a Federal license or permit provide a certification that any discharges from the facility will comply with the Act, including water quality standard requirements. Disputes have arisen over the States' exercise of authority under section 401, particularly the extent to which States can legally address water flow requirements in water quality standards. Much of the recent debate over section 401 certification has arisen between States and hydropower interests where States have used the certification authority in ways that can impede licensing by the Federal Energy Regulatory Commission (FERC). A 1994 Supreme Court decision which upheld the States' authority in this area dismayed development and hydroelectric power interest groups. (4) H.R. 961 includes an amendment which would make section 401 inapplicable to hydropower projects if FERC determines that the State's certification is inconsistent with the Federal Power Act. The bill also sets up a mechanism, to be administered by FERC, to resolve differences that might arise between the State and FERC, on questions relating to the consistency of the 401 certification to a hydropower licensing project.

CWA section 516, which requires EPA to do a biennial report estimating the Nation's funding needs for wastewater treatment plant construction, is amended by H.R. 961 to provide that the needs study be done quadrennially.

Title V includes a provision requiring Federal agencies to differentiate animal fats and vegetable oils from other oils, including petroleum-based oils, when implementing laws such as the CWA and the Oil Pollution Act of 1990.

General program authorizations are extended through FY 2000 at "such sums as may be necessary."

EPA is directed by another amendment in title V to consult with the Food and Drug Administration, Department of Health and Human Services, and other appropriate agencies when developing any effluent guideline, pretreatment standard, or other standard affecting the food processing industry.

Title V amends section 518 of the Act, concerning Indian tribes. Under current law, qualified Indian tribes are authorized to be treated as States, for purposes of receiving grant assistance and setting water quality standards. Implementation of this authority has caused conflict in some areas, and the bill directs EPA to promulgate regulations which provide a dispute resolution process when differing water quality standards set by States and Indian tribes produce "unreasonable consequences." The bill also bars tribes from regulating lands owned in whole or in part by nonmembers of the tribe which are located within the boundaries of the tribe's land. Finally, it increases CWA funding available to tribes from one-half of one percent to one percent.

TITLE VI, STATE WATER POLLUTION CONTROL REVOLVING FUNDS

Title VI of the bill amends Title VI of the CWA, State water pollution control revolving funds (SRFs). The SRF provisions, added to the law in 1987, superseded the categorical grant provisions of title II of the Act and now provide capitalization grants to aid States in operating loan programs for municipal wastewater treatment plant construction.

Title VI of H.R. 961 extends authorization for the SRF grants, providing $2.25 billion in FY 1996 and $2.3 billion annually in FY 1997-2000 (compared with FY 1995 SRF appropriations of $1.235 billion) and provides a new State-by-State allotment formula for SRF grant distribution based on population and recently estimated needs. See table 1 at the end of this report for illustration of the formula and its State-by-State impact. Table 1 shows the revised allotment formula, amounts that States would receive under the $2.25 billion authorized in the bill for FY 1996, and amounts that States would have received in FY 1995 under the current CWA versus H.R. 961 allotment formulas. The allotment formula in H.R. 961 as passed was included in H.R. 961 when it was introduced in February. During subcommittee markup a modified version was adopted which moderated some of the large percentage changes in allotment that several States would experience. However, during floor debate the House adopted a Lipinski amendment which replaced the subcommittee-approved formula with the version in the bill as introduced.

Title VI also contains several provisions to assist small and disadvantaged communities. It directs EPA to establish simplified procedures for small communities (serving a population of 20,000 or less) to obtain assistance under the SRF. Further, in the case of disadvantaged communities, the bill extends the SRF loan repayment period from 20 years to 40 years. Disadvantaged community is defined to be where the average annual residential sewer use charges exceed affordability criteria to be determined by EPA. Also, States are authorized to make SRF loans to disadvantaged communities at negative interest rates.

CWA title VI defines projects and activities which are eligible for assistance under the SRF, including categories of wastewater treatment projects, nonpoint source management, and assistance under the National Estuary Program. Title Vl of H.R. 961 expands eligibility to others including stormwater management, watershed management, acquisition of property rights for restoration or protection of riparian areas, implementation of water use efficiency measures, and implementation of plans to prevent water pollution.

H.R. 961 includes an amendment to encourage privatization of wastewater treatment works owned by a municipality or other local government entity. Procedures are specified in the bill, including determining the transfer price and recouping by the Federal Government of Federal grant awards associated with the original project.

Finally, title VI of the legislation deletes the requirement that SRF loan recipients comply with a number of cross-cutting CWA and other Federal requirements currently specified in the law. These include requiring consideration of alternative technologies, limiting use of funds for CSO projects, and approximately a dozen others. States and others contend that, while these limitations may have been appropriate under the old construction grants program, they inappropriately restrict loans made from State Revolving Funds. Requirements for compliance with the Davis-Bacon Act are not eliminated.

TITLE VII, MISCELLANEOUS PROVISIONS

Title VII provides technical amendments to the text of the CWA. It designates the EPA laboratory and research facility located in Duluth, MN as the John A. Blatnik National Fresh Water Quality Research Laboratory.

Title VII authorizes $50 million for grants to assist States along the U.S.-Mexico border with planning and constructing treatment works in border communities known as colonias

EPA is directed to conduct a study on the savings to cities in the construction, operation and maintenance of drinking water facilities resulting from CWA actions. It is widely recognized that wastes which are not discharged into the Nation's waters will not increase the demands on drinking water treatment facilities for water delivered to consumers, but there has been little attempt to quantify such savings.

TITLE VIII, WETLANDS CONSERVATION AND MANAGEMENT

Title VIII concerns wetlands regulatory programs, conservation and management. It incorporates language based on a wetlands proposal that Rep. Jimmy Hayes has introduced as H.R. 1330 in several recent Congresses. Its statutory purpose is to establish a new Federal wetlands regulatory program, and it does so by revising section 404 of the CWA, the dredge and fill permit program in the CWA. Section 404 is the principal Federal program that provides regulatory protection for wetlands. In recent years it has become a source of conflict between those who view it as a critical tool in wetland protection and others who see it as intruding on private land-use decisions, imposing an excessive economic burden. The changes contained in title VIII are among the most controversial provisions of H.R. 961 and were opposed by environmentalists and the Administration; efforts to amend this title in committee and during House debate were unsuccessful.

Compensation

H.R. 961 includes provisions of legislation passed by the House concerning private property owner compensation (division B of H.R. 9). It provides that if a Federal agency action under section 404 diminishes the fair market value of any portion of the property by 20 percent or more, the Federal Government shall compensate the owner for an amount equivalent to the diminution in value. If the diminution is more than 50 percent, the Federal Government is to buy the affected portion of the property. The bill sets some limitations (no compensation will be made for uses which are a nuisance, or for agency actions whose primary purpose is to prevent a hazard to public health or safety). It also establishes procedures for the property owner to seek compensation, for negotiations and for arbitration, if necessary. States which operate delegated 404 programs would not be required to pay compensation.

Classification and Permit Procedures

The revised section 404 would separate wetlands into three categories according to ecological significance, ranging from type A (the most ecologically valuable) to type C (the least valuable). The bill details procedures for permit issuance, following determination that an area is a wetland and following resolution of compensation, if applicable. In the case of type A wetlands (defined as wetlands of critical significance to the long-term conservation of the aquatic environment of which they are a part), permits would be issued following a sequential analysis seeking to avoid adverse impact on wetlands, minimize adverse impacts, and compensate for loss of wetland functions.

Type B wetlands (defined as those which provide habitat for a significant population of wetland-dependent wildlife or provide other significant wetlands functions) would not be subject to the same sequential analysis as type A wetlands, but the bill details factors to be considered for a type B wetland permit. These include quality and quantity of wetlands functions affected, costs of mitigation and benefits of the proposed activity, the environmental benefit of mitigation, and whether the impact on wetlands is temporary or permanent. Final decisions on all permit applications are to be made in 90 days. If a final decision is not made within that time, the permit is deemed approved. Type C wetlands are defined as those which serve limited wetlands functions or marginal functions but which exist in such abundance that regulation is deemed not necessary. Federal permits would not be required.

The U.S. Army Corps of Engineers would issue regulations governing mitigation for activities occurring in wetlands, allowing for minimization of impacts, enhancement or restoration of degraded wetlands as compensation, offsite compensatory mitigation, and other measures including contribution to a wetlands mitigation bank. In issuing permits, the Corps may require mitigation to prevent the unacceptable loss or degradation of type A wetlands or, in the case of type B wetlands, if the proposed activity will result in the loss or degradation of wetlands functions which are not temporary or incidental. The Corps also is directed to issue regulations for the establishment, use, and oversight of mitigation banks.

The revised section 404 would give the Corps sole responsibility to administer the Act's wetlands programs and would thus eliminate EPA's role of providing environmental guidelines and its current authority to veto a proposed 404 permit. The opportunity for other Federal agencies such as the Fish and Wildlife Service (FWS) to review and comment on permit applications also would be eliminated. A State's request to be delegated permitting authority would be reviewed by the Corps; under current law, this is EPA's responsibility. The Secretary of Agriculture would have sole responsibility to delineate wetlands on agricultural lands, including rangelands and lands used for livestock production.

As under current law, the Corps could issue general permits for activities that are similar in nature and that will not, separately and cumulatively, result in significant loss of ecologically valuable wetlands. Current law exempts certain specified routine activities, such as normal farming and ranching activities and routine farm maintenance practices, from permit requirements. The revised section 404 would exempt a number of other activities, such as those undertaken on farmed wetlands, incidentally created wetlands, or aggregate or clay mining activities conducted pursuant to a State or Federal permit which requires reclamation of affected wetlands. The bill also would exempt activities undertaken in a State with substantial conserved wetlands areas and which are for purposes of providing infrastructure, constructing and maintaining log transfer facilities, constructing tailings impoundments for mining, or constructing ice pads and ice roads. This latter exemption is apparently intended to address wetlands concerns in Alaska. Also, no wetland or U.S. water is to be subject to section 404 based solely on the fact that migratory birds use or could use the site.

Under current law, individual and general permits are issued for periods no longer than five years. The revised section 404 eliminates time limits on permits.

The revised section 404 would direct the Corps to establish standards governing the delineation of lands as wetlands, based on clear evidence of wetlands hydrology, hydrophytic vegetation, and hydric soils. (Current law does not specify delineation criteria, but Federal agencies have accomplished this administratively through an interagency manual which also uses hydrology, vegetation and soils criteria. Controversies surrounding the development and use of this Federal manual in recent years are largely responsible for pressure on policymakers to modify current wetlands regulatory programs.) In addition, the bill specifies that wetlands delineations are to be done during the growing season and that the hydrology criterion must require that water is present at the surface of the soil for 21 consecutive days in the growing season. This hydrology criterion is more restrictive than the criterion under current administrative practice, and critics argue that it will result in the loss of regulatory protection for many wetland areas.

The bill directs that wetlands regulated under section 404 are to be identified and classified within 10 years in a project to be conducted by the Secretary of Agriculture (for agricultural and associated nonagricultural lands) and the Secretary of the Army. (The FWS has been conducting a national wetlands inventory for several years, for the purpose of identifying wetlands, but not for regulatory purposes.) Any classification of wetlands is to be recorded on local property records.

The bill specifies a number of other regulations to be issued by the Corps within one year to implement the revised section 404, including standards for permit issuance, enforcement, and specification of sites for disposal of dredged or fill material from navigational dredging.

The revised section 404 would establish a new administrative appeals process allowing landowners and permit applicants to seek review of wetlands classifications or permit denials or requirements. Persons other than landowners or applicants could appeal only a determination that a proposed activity is not exempt under the provisions in the law. Any person who participated in the public comment process could participate in an appeal.

Under current law, violations of section 404 are subject to the same civil, criminal and administrative penalty sanctions as are violations of other provisions of the CWA. The revised 404 would provide new, less stringent penalties for violations of these provisions and specify in the case of civil penalties that the amount of the penalty should be proportional to the scope of the project. Authorized enforcement actions include issuance of a compliance order by the Secretary of the Army, a civil action and penalties, and criminal penalties. Title VIII also amends the Federal enforcement provisions of the CWA, section 309, to delete authority to use that section in connection with section 404 violations, relying instead on the revised section 404 enforcement authority.

Like current law, the revised 404 would allow qualified States to obtain authority to administer wetlands regulatory programs for individual or general permits. The revised State program language is largely the same as current law, but it eliminates language limiting State permits to five years in length. Current law authorizes EPA to review permits which delegated States propose to issue; the bill deletes this permit-by-permit review and replaces it with a review every five years by the Secretary of the Army to determine adequacy of the State's program. No grant funding is authorized to assist delegated States.

H.R. 961 would add a large number of definitions to the CWA which are not found in current law, including "wetlands," "incidentally created wetlands," "agricultural lands," "prior converted cropland," and "mitigation banking."

TITLE IX, NAVIGATIONAL DREDGING

Title IX amends portions of title I of the Marine Protection, Research and Sanctuaries Act (the Ocean Dumping Act) to streamline regulatory requirements applicable to navigational dredging. Under current law, the Corps issues permits for ocean dumping of dredged material, while EPA issues permits for ocean dumping of other material and designates sites for ocean dumping. Corps permits for dredged material are to be based on the same criteria utilized by EPA under other provisions of the Act, and to the extent possible, EPA-recommended dumping sites are used. EPA is authorized to impose permit conditions or even deny a permit, if necessary to prevent environmental problems.

H.R. 961 modifies these provisions by designating the Corps as the lead Federal agency for issuing ocean dumping permits for dredged and non-dredged material, designating dumping sites, and establishing permit criteria. The Corps would carry out this authority in consultation with EPA, but EPA's prior concurrence on transportation or disposal of dredged material would not be required. Other substantive criteria of the Ocean Dumping Act, including consultation with States, development of site management plans, and general permit conditions, are not altered by the bill.

TITLE X, ADDITIONAL PROVISIONS

This title of the bill contains amendments to section 6217 of the Coastal Zone Act Reauthorization Amendments (see discussion of CZARA in the "Nonpoint Source Pollution Management" portion of this report, above). The amendments in this title give EPA the lead role in administering the CZARA program (now shared by EPA and NOAA) and allow coastal States the option to choose participation in the CZARA or CWA section 319 nonpoint program. However, the State's choice would be subject to EPA review, and EPA could determine, in consultation with the State, that a State's choice of the voluntary nonpoint source plan under section 319 (as modified by H.R. 961) is not sufficient to address coastal nonpoint source pollution. EPA could then require the State to submit an enforceable CZARA plan instead.

Table 1. SRF Capitalization Grant Allotment under H.R. 961

Endnotes

l. For further information, see "Risk and Cost-Benefit: Comparison of Provisions in the 104th Congress," CRS Report 95-376 ENR. Public Law 104-4, the unfunded mandates legislation passed by Congress, also requires Federal agencies to do cost-benefit analysis of many proposed regulations.

2. The use designation of a water quality standard identifies the beneficial use or uses of a waterbody, such as for public water supply, recreation, propagation of fish and wildlife, navigation and other uses.

3. For additional information, see "Stormwater Permits: Status of EPA's Regulatory Program," CRS Report 94-811 ENR.

4. For further information, see "Clean Water Act Section 401: Background and Current Issues," CRS Report 95-2 ENR.