Safe Drinking Water Act Amendments of 1995:
Overview of S. 1316, as Passed

Mary Tiemann
Specialist in Environmental Policy
Environment and Natural Resources Policy Division

Updated December 18, 1995

95-1110 ENR

Summary

On November 29, 1995, the Senate passed S. 1316, the Safe Drinking Water Act (SDWA) Amendments of 1995, unanimously. The 1974 Act was last reauthorized in 1986. Both the House and Senate passed SDWA bills by wide margins in the past Congress, and strong interest in reauthorizing the Act continues in the 104th Congress. Many of the issues discussed in the SDWA debate, while specific to the Act, are of concern in the broader regulatory reform debate on unfunded Federal mandates and cost-benefit and risk analyses. Compliance with the increasing regulations under the 1986 amendments is proving difficult for States and public water systems, and the Act has become a popular target of complaints about unfunded mandates. Many believe the law gives States too little flexibility in implementing Federal requirements. Also, the Act is widely viewed as giving EPA insufficient flexibility to balance risk reduction benefits and costs when setting standards. Broad agreement also exists that the standard setting schedule mandated in 1986 is unrealistic and hampers EPA's ability to focus limited resources on regulating contaminants of greatest concern.

To address these and other issues, a bipartisan group of Senators introduced S. 1316 on October 12, 1995. The Senate Environment and Public Works Committee held hearings on October 19, and reported S. 1316 on October 24 (S. Rept. 104-169). The bill authorizes grants for State loan funds to help communities comply with Federal drinking water mandates, allows EPA to consider overall risk reduction when setting standards, directs EPA to conduct benefit-cost analyses for new regulations, authorizes States to modify certain monitoring requirements, and establishes a voluntary source water protection program. To help small systems, S. 1316 increases States authority to grant conditional variances from SDWA standards, and establishes programs for technical assistance and capacity development. The bill would authorize appropriations through FY2003. This report briefly outlines selected provisions of S. 1316, as passed by the Senate.

State Revolving Loan Funds

The 1986 SDWA amendments required EPA to regulate 83 contaminants by 1989 and to regulate 25 additional contaminants every 3 years. Many new regulations i have entered into effect and more are pending. Although EPA reports that the added cost of complying with Federal drinking water standards should not be significant for the majority of the population (which is served by large public water systems), the costs may increase substantially for many of the Nation's 52,000 small public water systems (PWSs). To date, no Federal funds have been provided under this Act to help communities comply with its requirements.

S. 1316, section 3, establishes a State Revolving Loan Fund (SRF) program to help public water systems finance improvements needed to comply with SDWA requirements. Patterned after the SRF program under the Clean Water Act (CWA), the bill provides grants to States to capitalize drinking water SRFs which States then use to make loans to public water systems. States must match at least 20 percent of the Federal grant. The bill allows a Governor to transfer up to 50 percent of the capitalization grant to the CWA SRF, or transfer an equivalent amount from the CWA SRF to the SDWA SRF. States may reserve up to 2 percent of their annual allotment to provide technical assistance to small systems (serving populations of 10,000 or fewer). Until a needs survey is completed, grants will be allotted to States using the formula for distributing State PWS supervision grants.

SDWA SRFs may be used to provide loan and grant assistance for capital expenditures for: 1) projects that facilitate SDWA compliance (including training operators of these facilities), 2) consolidating systems, 3) upgrading systems, and 4) developing public water systems to replace private supplies that pose significant health threats. States may use up to 30 percent of their SRF allocation to provide grants or forgive loan principal to help economically disadvantaged communities. Up to 15 percent of a State's grant may be used to support source water protection and capacity development programs.

S. 1316 authorizes appropriations of $600 million for FY1994 and $1 billion annually for FY1995 through FY2003 for SRF capitalization grants. Section 3 directs EPA to reserve from annual SRF appropriations: 1.5 percent for financial assistance to Indian Tribes; $10 million for health effects research on drinking water contaminants; $2 million, beginning with FY1997, to pay the costs of monitoring for unregulated contaminants; and no more than $10 million for technical assistance.

Contaminant Selection

The standard setting schedule established by the 1986 amendments was intended to increase the pace at which EPA regulated contaminants in drinking water. EPA has regulated the initial 83 contaminants specified by Congress except for arsenic, sulfate and radionuclides. To meet the first '25 every 3 years' requirement, EPA has proposed regulations for 13 contaminants including 12 disinfectants and disinfection byproducts (D/DBPs) and Cryptosporidium, while the remainder of the first set of 25 remains under study. EPA has been sued repeatedly for missing statutory deadlines, and many public water systems are also finding it difficult to comply with new requirements on time. Broad consensus has emerged that the current schedule is overly ambitious, does not prioritize risks effectively, and merits revision.

Section 4 specifies a schedule for EPA to complete regulations for D/DBPs and Cryptosporidium .

Section 4 also revokes the requirement that EPA regulate 25 contaminants every 3 years, and establishes a process for EPA to select and list contaminants for regulatory consideration based on occurrence and health effects. By 1996, EPA must publish a list of contaminants that may warrant regulation. EPA is required to develop a research plan for each listed contaminant to gain information on the health effects and occurrence of the contaminant and then to determine whether regulation is needed. Starting in 2001, EPA must make a regulatory decision for at least 5 listed contaminants every 5 years. EPA must then regulate those contaminants that occur at concentration levels and frequencies of public concern. EPA may promulgate an interim standard without first listing a contaminant if EPA determines that a contaminant presents an urgent threat to public health.

Risk Assessment

Section 5 amends the standard setting provisions of the Act; directs EPA to use sound, peer-reviewed science in developing regulations; and specifies how EPA must present health effects information to the public. EPA is required to conduct a health risk reduction and cost analysis for each drinking water regulation that contains a maximum contaminant level (MCL) or treatment technique and to seek public comment before proposing the regulation. The analysis must include: the benefits and costs of alternative MCLs or treatment techniques being considered, the incremental costs and benefits associated with each alternative MCL, the effects of the contaminant on the general population and sensitive subpopulations, any increased health risks associated with compliance, and other factors. This section authorizes appropriations of $35 million annually for EPA to conduct studies and analyses in support of regulations.

Standard Setting

SDWA currently directs EPA to set a maximum contaminant level goal (MCLG) at a level at which no known or anticipated adverse health effects occur and allows an adequate margin of safety. EPA is then to set an MCL as close to the MCLG as is "feasible" using the best technology available, taking costs into consideration. Legislative history directs EPA, when considering what is "feasible" to consider what is reasonably affordable for large metropolitan water systems. Because 80 percent of the population served by community water systems is served by large systems, this approach generally ensures that most people can receive high quality water at a reasonable cost. However, the remaining 20 percent of the population is served by small systems where economies of scale are absent, and compliance can impose high costs on households served by these systems.

Another issue is that the law does not give EPA flexibility to select an MCL that is less than feasible but that might provide very similar health protection at a substantially lower cost. Nor is EPA able to take into consideration whether treatment techniques used to control certain contaminants may actually increase the risk posed by other contaminants. (For example, public water systems use disinfectants, like chlorine, to kill microbial contaminants that can cause illness; however, disinfection by-products may cause cancer.)

Section 6 amends the standard setting provisions to give EPA authority to consider costs and benefits, including overall risk reduction benefits, when setting standards. EPA may set a standard at other than the feasible level if the feasible level would lead to an increase in health risks by increasing the concentration of other contaminants or by interfering with the treatment processes used to comply with other SDWA regulations. In such cases, the standards or treatment techniques must minimize the overall health risk. EPA may use this authority to consider overall risk reduction benefits when developing regulations for D/DBPs and Cryptosporidium.

Section 6 also requires EPA, when proposing a regulation, to publish a determination as to whether or not the benefits of the standard justify the costs. If EPA determines that the benefits of a standard do not justify the costs, EPA may promulgate a standard that maximizes health risk reduction benefits at a cost that is justified by the benefits. EPA may not use this authority to set less stringent standards if the benefits experienced by persons served by large systems would justify the cost to the systems, unless the contaminant is found almost exclusively in small systems. Nor may EPA use this authority to develop regulations for D/DBPs or Cryptosporidium. An EPA determination that the benefits of a standard do or do not justify the costs can only be set aside by a court (as part of a review of a final regulation) if it finds EPA's actions are arbitrary and capricious.

Sections 7, 8, and 9 give EPA added flexibility, time and instruction for developing rules for arsenic, radon, and sulfate. Section 7 gives EPA until 2001 to revise the existing arsenic standard, and directs EPA to adopt an arsenic research plan. (EPA has asked a Federal court for more time to develop this overdue rule.) Section 8 directs EPA to promulgate a radon standard within 180 days of enactment, and to set the standard at 3,000 picocuries per liter (pCi/l). (The proposed standard is 300 pCi/l.) EPA may revise this standard if scientific studies warrant it, and the revised standard can be no stricter than needed to reduce the risk from radon in drinking water to the risk posed by radon in outdoor air. Section 9 directs EPA to promulgate a sulfate regulation within 4 years, and authorizes EPA to allow systems to use public notification and to provide alternative water supplies to sensitive populations in lieu of centralized treatment. Sulfate has relatively minor health effects but is one of the 83 specified substances that EPA must regulate. (For more information on these contaminant regulations, see Environmental Protection Agency FY1996 Appropriations: Analyses of House-Passed Riders, CRS Report 95-966 ENR.)

Section 11 extends the time allowed before a newly promulgated regulation becomes effective from the current 18 months to 3 years. As much as 2 additional years may be allowed where the time is needed to make capital improvements.

Small Systems

As discussed above, EPA generally sets standard that are feasible (i.e., affordable) for large public water systems (serving populations of 10,000 or more). However, just 6 percent of community water systems are large, and 90 percent of these systems serve fewer than 3,300 persons. Many small systems may have difficulty affording treatment technologies needed to comply with SDWA regulations. Another problem facing small systems is that they often lack the technical, managerial, and financial capacity to comply with monitoring and other SDWA requirements. S. 1316 contains several provisions intended to improve the compliance capacity of small systems.

Technology. Section 12 revises SDWA's standard setting provisions to require that when EPA promulgates a regulation, the Agency must also issue guidance or regulations describing all treatment technologies for the contaminant that are feasible with the use of the best available technology, considering cost, for small systems serving: between 10,000 and 3,300 persons, 3,300 and 500 persons, and 500 and 25 persons. Section 10 directs EPA, when proposing the Enhanced Surface Water Treatment Rule, to also propose a regulation describing filtration technologies that are feasible for systems serving 3,300 or fewer persons.

Variances. The law currently allows a State to grant a variance if the source water prevents a system from complying with a standard. However, the variance can be granted only after the system has installed the appropriate treatment technology and the water still fails to meet the standard. Section 13 authorizes States to grant variances on the condition that a system will install the best available technology.

Section 14 further amends the Act's variance provisions to allow small systems to receive variances if they cannot afford to comply with SDWA regulations. States may grant to a system serving 10,000 or fewer persons a variance from a drinking water regulation if a system cannot afford to comply with the regulation and the State determines that the variance will adequately protect public health. To receive a variance, a system must install technology that EPA finds is affordable for small systems. Variances may not be granted from regulations for microbial contaminants.

Technical Assistance. Several other provisions aim to increase the compliance capacity of small systems. Section 12 directs EPA to make grants to institutes of higher education to establish at least 5 small public water system technology assistance centers. Section 14 authorizes funds for technical assistance. Section 15 directs States to ensure that new systems demonstrate technical, managerial, and financial capacity to comply with SDWA regulations and directs States to develop capacity development strategies. Section 16 requires that systems that receive SRF assistance may be operated only by persons that are trained and certified. These requirements are not imposed on systems that do not receive funding.

Source Water Quality Protection Partnerships

Currently, the Act has provisions to encourage protection of wellhead areas and sole source aquifers. In keeping with the polluter pays principle and the adage that an ounce of prevention is worth a pound of cure, many stakeholders in the SDWA debate would like Congress to increase the Act's emphasis on pollution prevention. EPA, public water suppliers, and environmental groups argue that source water protection can be the most cost-effective way to protect and improve drinking water quality. Others, including some agricultural interests, are concerned that any such provisions might impose new restrictions on land use activities. Many stakeholders agree that States and local governments should play lead roles in this matter.

Section 17 authorizes a new source water protection program based on voluntary partnerships between State and local governments. States may delineate source water areas for public water systems and conduct vulnerability assessments in priority areas. Also, States may establish source water quality partnership petition programs under which a community water system or local government may submit a petition to the State requesting assistance in developing a voluntary partnership to: 1) reduce the presence of contaminants in drinking water; 2) receive financial or technical assistance; and 3) develop a long-term source water protection strategy. States may use up to 10 percent of their annual SRF capitalization grant for projects recommended under the petition program. This section authorizes appropriations of such sums as may be necessary for EPA to make grants to States to cover up to 50 percent of the costs of administering this program.

Monitoring

Section 19 provides for increased monitoring flexibility at the Federal and State level. EPA is directed to review and, if necessary, revise existing monitoring requirements for at least 12 contaminants within 2 years. Additionally, States may establish alternative monitoring requirements for any regulation that does not address microbial contaminants. Alternative State requirements must ensure compliance with and enforcement of regulations, and may take effect only after completion of one cycle of monitoring under Federal regulations. For certain contaminants, States may waive quarterly monitoring requirements for small systems where contaminants are not detected in the first quarterly sample. This section also directs EPA to establish a program for monitoring unregulated contaminants, and a national drinking water database that includes information on the occurrence of regulated and unregulated contaminants in public water systems.

Other provisions of the bill attempt to fill various regulatory gaps. For example, S. 1316 requires States to adopt authority for administrative penalties for violations of State regulations, requires the Food and Drug Administration to issue bottled water standards for contaminants regulated under SDWA, and sets limits on the amount of lead that may leach from plumbing fixtures.

Conclusion

S. 1316 reflects a bipartisan effort to address regulatory reform and public health concerns. The legislation reduces the regulatory burden imposed on States and public water systems, increases State authority and flexibility, provides financial assistance for unfunded mandates, and directs EPA to consider costs and benefits when setting new standards. It also gives EPA greater flexibility to target contaminants of concern and provides funds to advance health effects research.

Although most parties agree that SDWA should be amended, support for S. 1316 is mixed. EPA has given its qualified support, but the Administrator is concerned that EPA would not be able to act quickly when a contaminant presents an urgent threat to public health. EPA would also like stronger pollution prevention provisions. Environmental groups are concerned that S. 1316 provides too many opportunities for systems to be exempt from SDWA requirements and that too much time is allowed for regulating various contaminants. A coalition representing States, cities, rural communities, and drinking water supply and research groups strongly supports S. 1316. The reauthorization debate now shifts to the House.