Safe Drinking Water Act Reauthorization Issues

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

Updated June 20, 1996

95-780 ENR

SUMMARY

The Safe Drinking Water Act (SDWA, 42 U.S.C. 300f-300j) was last substantially amended and reauthorized in 1986, and authorization of appropriations expired at the end of FY1991. A number of issues concerning the Act have become more significant in recent years, particularly with the implementation of the 1986 amendments. Key issues include: 1) the federal role in financing SDWA mandates imposed on states and localities; 2) the 1986 requirement that the Environmental Protection Agency (EPA) regulate 25 contaminants every 3 years; 3) the extent to which the law permits EPA to consider costs and risk-reduction benefits when setting standards; 4) the degree of flexibility allowed states and public water systems in meeting federal requirements; 5) enforcement of, and compliance with, the growing set of regulations (particularly small systems' compliance); and 6) attention to source water protection and pollution prevention.

In the 103rd Congress, the House and Senate each passed bills that addressed these and other issues. However, controversies over certain provisions and broader regulatory reform issues (particularly risk assessment and cost-benefit analysis) prevented Congress from resolving differences in the bills. In the 104th Congress, the effort to reauthorize SDWA continues, in tandem with broader efforts to address concerns over unfunded mandates and other regulatory reform issues. In October, the Senate Environment and Public Works Committee introduced a bipartisan bill, S. 1316, held hearings, and unanimously reported the legislation (S. Rept. 104-169). The Senate unanimously passed S. 1316, with several amendments, on November 29. After several months of bipartisan negotiations, the House Committee on Commerce unanimously approved its SDWA bill, H.R. 3604, on June 11, 1996. This report provides a brief background on the Act and reviews selected reauthorization issues.

BACKGROUND

Congress enacted the 1974 Safe Drinking Water Act (P.L. 93-523) after a nationwide study of community water systems revealed widespread water quality and health risk problems resulting from poor operating procedures, inadequate facilities, and poor management of public water supplies in communities of all sizes. (1) The 1974 law gave EPA substantial discretionary authority to regulate drinking water contaminants, both in terms of contaminant selection and regulatory time frame. The law also established the existing federal-state arrangement in which states may be delegated primary implementation and enforcement authority for the drinking water program. (For more information, see CRS Issue Brief 91041, Safe Drinking Water Act: Implementing the 1986 Amendments.)

The SDWA Amendments of 1986 (P.L. 99-339) attempted to address several perceived deficiencies in the statute and in its implementation. A key concern was that from 1974 until 1986, EPA had regulated just one additional contaminant beyond the 22 drinking water standards previously developed by the Public Health Service. In the absence of federal action, states individually were developing standards to address contaminants found in water supplies. In 1984, states urged Congress to set a firm, but realistic, regulatory schedule, and Congress agreed that mandatory deadlines were needed to accelerate EPA's standard-setting progress.

In the 1986 amendments, Congress directed EPA to issue final regulations for 83 contaminants by 1989 and to regulate an additional 25 contaminants every 3 years thereafter. To date, EPA has regulated 84 contaminants (including 76 of the specified 83), and is currently developing regulations for the first group of 25 contaminants. The implementation of this provision has increased the significance of other SDWA issues facing states, EPA, and public water systems and has prompted considerable interest in revising the statute again.

ISSUES AND PROPOSALS

In 1993, the Clinton Administration offered recommendations to Congress for reauthorizing SDWA that it believed would address the major concerns involving the Act. These recommendations included:

-- establishing a drinking water State Revolving Fund program;
-- revising the process for selecting contaminants for regulation;
-- increasing EPA flexibility for setting compliance timeframes;
-- better ensuring the viability of small systems;
-- establishing "best available technology" (BAT) for small systems;
-- implementing programs to protect sources of drinking water;
-- providing flexibility for states with source water protection programs;
-- training and certifying system operators; and
-- streamlining and strengthening enforcement provisions.(2)

Each of these issues and others are addressed in S. 1316 and H.R. 3604. Several key issues are reviewed below.

Drinking Water Infrastructure Funding

EPA and states report that many of the nation's 60,000 community water systems may lack the financial capacity to meet the rising costs of SDWA compliance. Unlike the Clean Water Act (CWA), which has long provided federal funding for municipal wastewater treatment works, SDWA does not provide resources for financing construction of treatment facilities needed to comply with SDWA requirements. Consequently, this statute has been a common target of complaints about unfunded federal mandates.

To help communities finance projects needed to comply with SDWA regulations, EPA's budget request for FY1994 proposed creating a state revolving loan fund (SRF) program to be funded at a level of $599 million for FY1994 and $1 billion in each of the next four years. This proposal parallels a CWA SRF program Congress authorized in 1987 to replace a grant program for financing sewage treatment plants. Congress approved a total of $1.3 billion for a SDWA SRF program for FY1994 and FY1995, contingent upon the enactment of authorizing legislation, but rescinded all but $225 million, noting that enactment did not appear to be imminent. In H.R. 3019, the supplemental spending measure for FY1996, Congress reserved these funds plus another $500 million, provided legislation is enacted by August 1, 1996. S. 1316 and H.R. 3604 authorize this program as does H.R. 2747, an SRF bill reported by the House Transportation and Infrastructure Committee.

SDWA regulatory issues aside, a potentially larger problem involves the level of investment that public water systems have planned for improving, expanding, and operating and maintaining their system infrastructure. This problem is particularly challenging for the 52,000 small community water systems. EPA in 1995 reported that outdated and deteriorated drinking water infrastructure "poses a fundamental long-term threat to drinking water safety in the United States." (3) In many communities, basic infrastructure costs could far exceed SDWA compliance costs.

Standard-Setting Schedule

The standard-setting schedule established in 1986 (25 contaminant regulations every 3 years) was intended to increase the pace at which EPA regulated contaminants in drinking water. Since then, wide agreement has emerged, even among those who originally supported the provision, that the current schedule is too rigorous to be sustained by EPA, or complied with by states and public water suppliers. A key criticism of the current approach is that the law requires EPA to regulate an ever-growing number of contaminants without regard to the frequency of occurrence or whether the contaminants occur at levels of public health concern.

EPA and a coalition comprised of organizations representing states, cities, rural communities, public water suppliers and others have criticized the Act's regulatory schedule and question the benefits of some of the required regulations. These groups and EPA favor replacing the current approach with a process that gives EPA flexibility to select contaminants for regulation based on their occurrence and risk to human health, and thus allow resources at all levels of government to be focused on risk-based priorities. S. 1316 and H.R. 3604 revise the current process for selecting contaminants for regulation. (For more details, see Safe Drinking Water Act Amendments of 1996:: Overview of S. 1316, as Passed, CRS Report 95-1110.)

As a practical matter, EPA lacks the resources needed to develop all the required regulations in a timely and high quality fashion, and the Agency has been sued repeatedly for missing SDWA statutory deadlines. Although legislative action is required to change the standard-setting schedule, EPA has worked to negotiate extensions of court-ordered deadlines for various overdue regulations so that the Agency may pursue a regulatory plan that reflects risk-based priorities.

Standard-Setting Process

Concern over the costs of specific drinking water regulations has prompted Congress to intervene in the Act's implementation through recent appropriations laws. For FY1994, FY1995, and FY1996, Congress has prohibited EPA from using funds to promulgate a congressionally mandated radon regulation. This action reflects a view in Congress that the Act currently gives EPA too little direction or flexibility to consider risk reduction benefits and costs when setting standards.

In setting standards, the Act directs EPA to establish a nonenforceable maximum contaminant level goal (MCLG) for a contaminant at a level at which no known or anticipated adverse health effects occur and which allows an adequate margin of safety. For carcinogens, EPA sets MCLGs at zero. Simultaneous to proposing an MCLG, EPA must propose an enforceable standard, the maximum contaminant level (MCL). The MCL is to be set as close to the MCLG as is "feasible" with the use of the best technology available (taking cost into consideration). Legislative history directs that EPA's determination of what technologies are available (and therefore what standard is feasible) is to be based on what may reasonably be afforded by large metropolitan or regional public water systems. (4) Only about 6% of systems are considered large by EPA standards; consequently, many smaller systems may experience financial difficulty meeting MCLs.

S. 1316 and H.R. 3604 both revise the standard setting approach to give EPA flexibility to set a standard that is less stringent than "feasible" if the less stringent standard reduces overall health risks. Also, for certain contaminants, if the benefits of the feasible 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. Various stakeholders in the SDWA debate support the proposed changes to the Act's standard-setting provisions, with EPA and environmental groups preferring H.R. 3604. In addition to the general changes, the bills each include separate provisions for arsenic, radon, and sulfate.

EPA's risk assessment, risk characterization, and cost-benefit analysis practices that support standard setting efforts have been the subject of considerable debate in Congress, and these interrelated issues are being addressed in SDWA legislation as well as in broader regulatory reform and risk assessment bills.(5) S. 1316 and H.R. 3604 contain similar language requiring EPA to conduct benefit-cost analyses when developing new standards. Additionally, both bills direct EPA to use sound scientific practices in setting standards and to present risk information clearly to the public.

While many in Congress agree on revising the current standard setting process, views have differed greatly on how costs and risks should be balanced, making this the most difficult issue to resolve in the SDWA debate. Nonetheless, the Senate and the House Commerce Committee each were able to reach consensus on this matter.

Small Systems

Nearly 90% of the nation's 60,000 community water systems serve fewer than 3,300 persons, and 30% serve fewer than 100 persons. EPA and states have documented the difficulties many small systems face in meeting SDWA rules, and more fundamentally, in ensuring the quality of their water supplies. The key problems identified by EPA include: deteriorated infrastructure; lack of access to capital; limited customer and rate base; inadequate rates; diseconomies of scale; and limited technical and managerial capabilities. Although these systems serve just 10.7% of the population served by community water systems, the sheer number of small systems makes their problems significant and challenging to policymakers.

In a 1993 report to Congress, EPA emphasized three areas for consideration in reauthorization that, if addressed, could help solve the problems faced by small water systems. These issues include: 1) viability (i.e., the technical, financial and managerial capability of some small systems to operate effectively); 2) the need for lower-cost treatment technologies; and 3) financing.(6)

Because of economies of scale, small systems often have difficulty affording treatment technologies that are affordable for large systems. S. 1316 and H.R. 226 authorize states to grant variances to small systems provided they use technology that is affordable for small systems and that adequately protects public health. Under S. 1316, systems serving 10,000 or fewer persons may receive these variances, while H.R. 3604 applies this provision only to systems serving 3,300 or fewer. EPA, states and municipalities support small system variances. Environmentalists support H.R. 3604, but object the inclusion of larger systems under the Senate provisions.

While participants in the SDWA debate agree that small systems need more technical and financial assistance to comply, many, including EPA and states, agree that some action is appropriate to discourage the formation of new systems that are unlikely to meet SDWA requirements and to promote restructuring of systems that have ongoing, serious compliance problems. Mixed views exist, however, as to what actions are most appropriate, and at what level of government. S. 1316 and H.R. 3604 direct states to obtain the legal authority or other means to prevent the formation of new systems that lack the capacity to comply with the Act. Both bills withhold part of a state's SRF grant if such authority is not obtained, with H.R. 3604 withholding the larger amount (20% as compared to 15% in out years). (H.R. 3604 also withholds 20% of SRF funds from states that do not meet new operator certification requirements, while S. 1316 requires that systems receiving SRF funds must have certified operators.) The Senate bill includes grant money for existing Environmental Finance Centers to establish a capacity clearinghouse for public water systems. Rural water groups support the Senate's small system provisions, while EPA and environmental groups prefer the House bill, although EPA has stated that S. 1316 is acceptable as well.

Monitoring Flexibility

Monitoring for contaminants can be costly, particularly for smaller systems, and requirements continue to increase with new regulations. A frequent complaint is that money is being wasted on repeated monitoring for contaminants that are not detected. Currently, EPA gives states some flexibility to grant waivers from monitoring requirements, but for various reasons, few states utilize this flexibility. States and municipalities would like Congress to give states clear authority to tailor monitoring requirements to meet local conditions. S. 1316 and H.R. 3604 authorize states to modify such requirements for most contaminants (excluding microbial and certain other contaminants) under specified circumstances. Both bills also direct EPA to revise monitoring requirements for at least 12 existing contaminant regulations. H.R. 3604 is more prescriptive, requiring a source water assessment to be completed before a system may be eligible for permanent monitoring relief.

Other Issues

Among other similarities, the House and Senate bills include source water assessment provisions, although the approach taken in H.R. 3604 embraces a stronger federal role. Both bills direct EPA to establish a screening program to evaluate the estrogenic effects of pesticides and other chemicals, while only the House bill requires public water systems to issue to customers annual reports discussing all contaminants detected in the water supplied during the year.

The House and Senate authorizing committees have been widely lauded for their SDWA reauthorization efforts. It now remains to be seen if the process can continue to move forward, particularly given the number of legislative days remaining and other items on the congressional agenda.

Endnotes

1. U.S. Environmental Protection Agency. Community Water Supply Study: Significance of National Findings, 1971, in A Legislative History of the Safe Drinking Water Act, Senate Committee on Environment and Public Works. Serial no. 97-9, Feb. 1982. p. 1076.
2. U.S. Environmental Protection Agency. Safe Drinking Water Act Reauthorization Overview. EPA 810/S-94-001. February 1994.
3. U.S. Environmental Protection Agency. Strengthening the Safety of our Drinking Water: A Report on Progress and Challenges and an Agenda for Action. EPA 810-R-95-001. March 1995. p. 9.
4. The House report accompanying the Safe Drinking Water Act of 1974 explained congressional reasoning on this matter, stating that, "the quality of the Nation's drinking water can only be upgraded if the systems which provide water to the public are organized so as to be most cost-effective. In general, this means larger systems are to be encouraged and smaller systems discouraged. For this reason, the Committee intends that the Administrator's determination of what methods are generally available (taking cost into account) is to be based on what may reasonably be afforded by large metropolitan or regional public water systems. This, of course, means that some small water systems which cannot afford the methods determined by the Administrator to be 'generally available' will be unable promptly to comply with all primary regulations. For this reason, authority to grant exemption from the effective date of the primary regulations and thus to delay the date for compliance by public water systems has been provided in section 1416." Source: U.S. Congress. Senate. Legislative History of the Safe Drinking Water Act. H. Rept. 93-1185. Feb. 1982. p. 550. Congress subsequently reiterated this view and EPA has generally relied on legislative history for guidance. Since 1974, however, more small systems have formed, few have consolidated, and for various reasons States have granted very few exemptions.
5. See The Role of Risk Analysis and Risk Management in Environmental Protection, CRS Issue Brief 94036, by Linda Jo Schierow.
6. Environmental Protection Agency. Technical and Economic Capacity of States and Public Water Systems to implement Drinking Water Regulations, Report to Congress. Sept. 1993. 127 p.