Allotment of Drinking Water State Revolving Fund Monies; Notice
[Federal Register: March 18, 1997 (Volume 62, Number 52)]
[Notices]
[Page 12899-12903]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18mr97-129]
[[Page 12899]]
_______________________________________________________________________
Part III
Environmental Protection Agency
_______________________________________________________________________
Allotment of Drinking Water State Revolving Fund Monies; Notice
[[Page 12900]]
ENVIRONMENTAL PROTECTION AGENCY
[FRL-5708-2]
Allotment of Drinking Water State Revolving Fund Monies; Notice
AGENCY: Environmental Protection Agency.
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SUMMARY: The Environmental Protection Agency (EPA) is announcing its
decision on allotment of Drinking Water State Revolving Fund (DWSRF)
monies to States. For fiscal year 1997, funds will be allotted based on
the formula used to distribute public water systems supervision grants
in fiscal year 1995. For fiscal year 1998 and subsequent fiscal years,
funds will be allotted based on each State's proportional share of the
total eligible needs for the States, derived from the Drinking Water
Infrastructure Needs Survey: First Report to Congress. Each State will
be allotted at least one percent of the funds available to the States.
Introduction
The DWSRF program was established by the reauthorized Safe Drinking
Water Act (SDWA), signed by President Clinton on August 6, 1996. The
SDWA authorizes $9.599 billion for the DWSRF program through FY 2003.
For FY 1997, EPA's budget includes $1.275 billion for the DWSRF
program. EPA's Office of Water is the national program manager for the
SDWA, including the DWSRF program. As intended by Congress, the DWSRF
program will be implemented largely by the States.
Fiscal Year 1997
Funds available for allotment to States in FY 1997 will be allotted
based on the formula used to distribute public water system supervision
grant funds in FY 1995 (SDWA Section 1452(a)(1)(D)(i)). In accordance
with the law, each State, including the District of Columbia, will be
allotted at least one percent of the funds available for allotment to
all the States. The law also requires that the Virgin Islands, the
Commonwealth of the Northern Mariana Islands, American Samoa, and Guam
together receive an allotment not to exceed 0.33 percent of the total
funds available for allotment. The formula results are shown below for
each State in dollar terms as well as in percentages of the funds
available to the States. Allotment amounts are rounded to the nearest
one hundred dollars. Under the law, the funds available for allotment
to the States are determined by deducting national set-asides from the
total DWSRF appropriation. In fiscal year 1997, this means that the one
and one half percent set-aside for Native Americans, which totals
$19,125,000, is removed from the total appropriation to calculate the
level of funds available to the States. In fiscal year 1997,
$1,255,875,000 is the level of funds available to the States.
Fiscal Year 1997 DWSRF Final Allotment Results
Alabama $12,558,800 (1.00%);
Alaska $ 27,039,000 (2.15%);
Arizona $16,938,300 (1.35%);
Arkansas $12,558,800 (1.00%);
California $75,682,600 (6.03%);
Colorado $16,784,100 (1.34%);
Connecticut $21,408,200 (1.70%);
Delaware $12,558,800 (1.00%);
District of Columbia $12,558,800 (1.00%);
Florida $45,132,600 (3.59%);
Georgia $25,775,000 (2.05%);
Hawaii $12,558,800 (1.00%);
Idaho $14,157,800 (1.13%);
Illinois $38,502,400 (3.07%);
Indiana $25,712,100 (2.05%);
Iowa $16,857,300 (1.34%);
Kansas $14,095,000 (1.12%);
Kentucky $12,558,800 (1.00%);
Louisiana $20,420,300 (1.63%);
Maine $12,653,200 (1.01%);
Maryland $17,640,900 (1.40%);
Massachusetts $14,344,600 (1.14%);
Michigan $59,681,100 (4.75%);
Minnesota $42,086,000 (3.35%);
Mississippi $16,474,200 (1.31%);
Missouri $21,857,600 (1.74%);
Montana $14,826,200 (1.18%);
Nebraska $12,824,000 (1.02%);
Nevada $12,558,800 (1.00%);
New Hampshire $13,754,800 (1.10%);
New Jersey $27,947,300 (2.23%);
New Mexico $12,759,800 (1.02%);
New York $59,167,700 (4.71%);
North Carolina $46,114,100 (3.67%);
North Dakota $12,558,800 (1.00%);
Ohio $43,073,000 (3.43%);
Oklahoma $17,561,900 (1.40%);
Oregon $18,920,500 (1.51%);
Pennsylvania $53,270,700 (4.24%);
Puerto Rico $12,558,800 (1.00%);
Rhode Island $12,558,800 (1.00%);
South Carolina $14,821,600 (1.18%);
South Dakota $12,558,800 (1.00%);
Tennessee $12,776,200 (1.02%);
Texas $70,153,800 (5.59%);
Utah $12,558,800 (1.00%);
Vermont $12,558,800 (1.00%);
Virginia $29,442,400 (2.34%);
Washington $31,145,900 (2.48%);
West Virginia $12,558,800 (1.00%);
Wisconsin $41,546,400 (3.31%);
Wyoming $12,558,800 (1.00%);
Other Areas 1 $4,144,400 (0.33%)
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\1\ Other Areas include: the Virgin Islands, American Samoa,
Guam, and the Commonwealth of the Northern Mariana Islands.
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Fiscal Year 1998 and Subsequent Fiscal Years
Under SDWA Section 1452(a)(1)(D)(ii), Congress has directed that
capitalization grants for FY 1998 and subsequent years be allotted
among States based on each State's proportional share of the State
needs identified in the most recent Drinking Water Needs Survey,
provided that each State be allotted a minimum share of one percent of
the funds available for allotment to all the States. The first Drinking
Water Needs Survey was conducted over the last two years with the
cooperation of every State. The results of the Survey were presented to
Congress on January 29, 1997.
Options Presented for Public Comment
On October 31, 1996, EPA solicited public comment on six options
for using the results of the Drinking Water Needs Survey to allocate
DWSRF monies among States (61 FR 56231). The options presented in that
Federal Register notice are summarized below. All of the options
discussed below assume that each State, and the District of Columbia,
will be allotted a minimum share of one percent of the funds available
for allotment to all the States, as required by law. All of the options
also assume, as required by law, that the Virgin Islands, the
Commonwealth of the Northern Mariana Islands, American Samoa, and Guam,
will together receive an allotment not to exceed 0.33 percent of the
funds available for allotment to the States. The funds available for
allotment to the States will be the level of funds appropriated by
Congress, less the national set-asides, which include funds reserved
for Indian Tribes and Alaska Native water systems. This framework was
specified by Congress in the 1996 amendments to the SDWA (Section
1452).
Option 1 was a formula that would allocate DWSRF monies to
States based on each State's share of the total need. Total need is the
capital infrastructure need faced by publicly and privately owned
community water systems nationwide. Total need includes both current
and future needs for the 20-year period from January 1995 through
December 2014. This option was the one most favored by commenters, and
was selected by EPA, with some modifications, as the basis for the
allotment formula. As discussed below, total eligible need is the basis
for allocation of DWSRF monies.
Option 2 was a formula based on each State's share of
Current Need. Current Need is identified as all infrastructure
improvement projects needed now to protect public health.
Option 3 was a formula based on Current SDWA Need, which
represents capital improvement projects needed
[[Page 12901]]
now to ensure compliance with existing SDWA regulations. Current SDWA
Need does not include distribution need tied to the Total Coliform Rule
(TCR).
Option 4 was a formula based on Total SDWA Need. This
component of need includes Current SDWA Need and Future SDWA Need.
Future SDWA need includes projects needed over the next 20 years for
compliance with existing regulations, as well as for the proposed
Disinfectants and Disinfection Byproducts and Enhanced Surface Water
Treatment Rules. Total SDWA Need does not include distribution need
tied to the TCR.
EPA also solicited comments on hybrid options that would take
advantage of the strengths of different options and/or address concerns
for meeting the needs of small systems. EPA presented two such options
in its request for comments:
Option 5 was a hybrid of Current Need and Current SDWA
Need (e.g., 50% of the formula based on a State's share of Current
Need, with the other 50% based on Current SDWA Need). Such an approach
would combine the benefits of formulas based on both types of need. The
Current SDWA Need component would place emphasis on the projects
required now for compliance with regulations, while the Current Need
component would take into account all projects needed now--including
current distribution need associated with the TCR.
Option 6 was a hybrid formula emphasizing the needs of
small systems (e.g., basing 50% on total need and 50% on small system
need). Giving added weight to small system need would acknowledge the
special problems of small systems. Small water systems have both a
higher per-household need and more trouble in maintaining compliance
with drinking water regulations than larger systems.
In addition to comments on these hybrid options, EPA requested
suggestions for other hybrid options. EPA also requested comment on the
percentages to employ in any hybrid. EPA requested that commenters
suggesting alternative hybrids or other options not included in the
Federal Register notice keep those options within the scope of the law.
The law requires that funds be allotted to States based on each State's
proportional share of the State needs identified in the most recent
Drinking Water Needs Survey.
Summary of Comments
EPA received 23 responses to its request for comments. These
commenters included the following:
12 State representatives.2
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\2\ The State of Alaska Department of Environmental Conservation
submitted two separate responses.
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6 regional or city water agencies.
5 associations.
Almost three-fourths of the commenters (15) favored Option 1, total
need, as their first choice. In addition, 6 commenters supported the
total need option as either their second choice, or as the most
significant factor in a hybrid formula. Thus, 21 of the 23 commenters
supported use of total need in some significant manner. The other
options that received support were: Option 2, Current Need (1
commenter); Option 6, Total or SDWA Need with an emphasis on small
systems need (5 commenters); and two allotment formula options not
presented in the request for comments (2 commenters). A summary of
comments appears below.
Comments Favoring Total Need
As stated above, the majority of comments supported Option 1, total
need. Commenters from all but one State favored this option, and all
State representatives participating in the October 14, 1996, meeting of
the Association of State Drinking Water Administrators favored this
option.
Commenters in favor of total need argued that this option is most
consistent with the intent of SDWA. They noted that total need was the
bottom-line of the Drinking Water Needs Survey. Section 1452(a)(1)(D)
of the SDWA requires that DWSRF monies for fiscal year 1998 and
following years be allotted to States based on each State's
proportional share of the State needs identified in the most recent
Drinking Water Infrastructure Needs Survey. These commenters
interpreted this provision to mean the bottom line total need in the
survey. Additionally, statistical precision associated with total need
is the highest.
According to the commenters, this approach appropriately provides
States with flexibility to determine which needs are critical for
protecting public health, does not put States with the most active SDWA
compliance programs at a disadvantage, includes distribution system
needs associated with the TCR, and encourages proactive health
protection. In addition, these commenters noted that many of the
projects identified as future needs when the information was collected,
are now or will become current needs during the lifetime of this
formula.
EPA is persuaded by the arguments of the commenters that supported
Option 1, total need. The Agency feels that this approach recognizes
the differences in need among States and gives the maximum degree of
flexibility. The Agency will allot funds to each State based on the
State's proportional share of total eligible needs reported for the
most recent Drinking Water Needs Survey conducted under SDWA Section
1452(h). Each State shall be allocated a minimum of one percent of the
funds available to States, as required under SDWA Section
1452(a)(1)(D)(ii). Once funds have been allotted, States must then
choose projects for funding based on the criteria in the law. The law
requires that State Intended Use Plans, to the maximum extent
practicable, give priority for funding to projects that address the
most serious risk to human health, are necessary to ensure compliance
with SDWA requirements (including filtration), and assist systems most
in need on a per household basis, according to State affordability
criteria.
Total eligible need for the purpose of the allotment formula will
include most but not all types of need under the category of total need
reported for the Drinking Water Infrastructure Needs Survey: First
Report to Congress. Total eligible need for the allotment formula (or
total eligible need) will not contain projects that are ineligible for
DWSRF funding. Projects not eligible for funding that are included in
the Drinking Water Infrastructure Needs Survey: First Report to
Congress are new and improved dams and reservoirs. These ineligible
projects total just over three percent of the total need identified in
the Drinking Water Infrastructure Needs Survey: First Report to
Congress.
Comments Favoring Current Need
One commenter provided an argument against Option 1, total need,
stating that it would require public water systems or States to project
future needs, which depend on a variety of factors. For this reason,
the commenter advocated Option 2, Current Need. However, EPA notes that
the Drinking Water Needs Survey included only well-documented future
needs that affect the current population and are very likely to be
implemented. Furthermore, the Agency notes that most future needs are
no more than five years away, because systems generally plan only five
years in advance. Consequently, EPA believes that basing the allotment
formula upon total needs will not result in an unfair distribution of
funds.
Comments Favoring Small System Need
In addition to the commenters that favored total need and the one
commenter that favored Current Need, five commenters favored a hybrid
[[Page 12902]]
option that emphasizes small system needs. Four commenters advocated a
hybrid of total need and total need for small systems, and one
commenter advocated a hybrid of Total SDWA Need and Total SDWA Need for
small systems.
One commenter supported a hybrid option emphasizing small system
needs because the commenter felt that it would be most beneficial to
the commenter's State. Some commenters believed that the Drinking Water
Needs Survey underestimated small system need because many small
systems do not have the resources available to document current and
future needs. Additionally, commenters argued that this option was most
consistent with the SDWA's intent to provide relief to small systems
and address the most serious threats to public health.
EPA disagrees that small system needs have been underestimated. The
approach for estimating small system needs was developed by a workgroup
that included State representatives. Under this approach, a
statistically significant sample of small systems participated in the
Drinking Water Needs Survey. Because the workgroup was aware that many
small systems would not have the capacity to document their needs, the
approach called for site visits to all selected systems. EPA staff and
other water system professionals, often accompanied by State personnel,
interviewed small system operators, examined all system components, and
developed documentation on site. If project costs were not available,
this documentation, along with data provided by States, engineering
firms, and other water systems, was used to model small system costs.
EPA believes this methodology yielded a very accurate estimate of need
for small systems.
It was not feasible to conduct a survey of small systems that was
statistically significant on a State-by-State basis because the
Drinking Water Needs Survey approach emphasized the importance of
accurately capturing small system needs through site visits. Therefore,
the workgroup's approach called for a survey that was statistically
significant on a national basis. (For medium and large systems, the
survey was statistically significant on a State-by-State basis.) The
national small system need was distributed among States based on the
number of small systems in each State, taking system size and type
(surface vs. ground) and regional construction cost trends into
account. Since small system needs were not based on State-by-State
samples, EPA concludes that it would not be appropriate to assign a
disproportionately heavy weight to small system needs in the allotment
formula.
Additionally, EPA notes that the decision to utilize Option 1,
total need, does not diminish access by small systems to DWSRF funding.
The formula allocates money to States, which in turn determine how to
distribute the funds to systems. As required under SDWA 1452(a)(2),
States must make available to small systems a minimum of fifteen
percent of DWSRF funds, and it is within their purview to distribute a
greater percentage. There is no reason to believe that weighting small
system needs in the allotment formula would affect States'' decisions
to provide DWSRF funding to small systems. The Agency adds that the
reauthorized SDWA provides other relief for small systems. The Act
includes provisions that allow States to issue subsidized loans to
``disadvantaged communities''. Further, it allows States to use two
percent of their allotments for technical assistance to small systems
serving 10,000 or fewer people. In addition, the SDWA requires that
States make available a minimum of 15 percent of all dollars credited
to a DWSRF for loan assistance to small systems that serve fewer than
10,000 persons.
Comments Suggesting Other Options
Two commenters advocated allotment formula options not presented in
the October 31, 1996, Federal Register notice requesting comments. One
commenter suggested a formula that would take into account either the
number of individuals without piped water or State populations.
However, EPA notes that SDWA Section 1452(a)(1)(D)(ii) requires that
DWSRF funding be allocated to States based on a State's proportional
share of the State needs identified in the most recent Drinking Water
Needs Survey of eligible water systems. No provision is made in the law
to distribute DWSRF funds to States based on the number of individuals
without piped water or on population.
Another commenter suggested a hybrid formula based 50 percent on
total need and 50 percent on Current SDWA Need. While EPA recognizes
that current SDWA need emphasizes many of the most serious threats to
public health, many commenters pointed out that the category does not
cover all projects needed to protect public health.
There were no comments received in favor of Options 3 or 4.
The commenters also addressed other, related issues. Most
significantly, commenters requested that EPA reevaluate the allotment
formula after the completion of the next Drinking Water Needs Survey.
The results of the next Drinking Water Needs Survey are due to Congress
in February 2001 (SDWA Section 1452(h)). In late 2000, EPA intends to
again solicit comments on the allotment formula for the purpose of
evaluating whether the DWSRF allotment formula should be modified.
Some commenters also questioned whether comments on the allotment
formula should have been solicited before the results of the Drinking
Water Infrastructure Needs Survey were made available. The Agency
believes that seeking comments on the options for the allotment formula
before the survey results were available invited commenters to provide
impartial comments on which option best meets the intent of the
reauthorized SDWA. EPA is confident that this approach helped ensure
that the chosen allotment method was equitable and would meet the
intent of the SDWA.
EPA appreciates the participation of all commenters in this
process. To reiterate, the Agency will use an allotment formula that
allocates to each State a share of funding proportional to the State's
total eligible need as determined by the Drinking Water Infrastructure
Needs Survey: First Report to Congress (SDWA Section 1452(a)(1)(D)).
Each State, and the District of Columbia, shall be allotted a minimum
of one percent of the funds available for allotment to States (SDWA
Section 1452(a)(1)(D)(ii)). The Virgin Islands, American Samoa, Guam,
and the Commonwealth of the Northern Mariana Islands, will together
receive an allotment not to exceed 0.33 percent of the funds available
for allotment to the States (SDWA Section 1452(j)). The funds available
for allotment to the States will equal the level of funds appropriated
by Congress, less the national set-asides.
The national set-asides for fiscal year 1998 include funds for
Indian Tribes and Alaska Native Village water systems at the level of
one and one half of one percent of the total appropriation. (SDWA
Section 1452(i)). This comes to $10,875,000 for Indian Tribes and
Alaska Native Villages in fiscal year 1998. Also, a national set-aside
of $2,000,000 is anticipated to be used for monitoring for unregulated
contaminants. If funds are appropriated for the DWSRF at the level of
the President's budget of $725 million and if the anticipated national
set-asides do
[[Page 12903]]
not change, the total funds available to the States would equal
$712,125,000. Each State's allotment, based on these assumptions, is
shown below. Because the percentages are based on the total funds
available for allotment to the States, they can be used for planning
purposes for future years. Once the appropriated amount and national
set-asides are known, a State's allotment can be estimated by
subtracting the national set-asides from the total funds available for
allotment and then applying the appropriate percentage shown below.
Fiscal Year 1998 DWSRF Allotment Results (Based on the President's
Budget of $725 Million and National Set-Aside Assumptions)
Alabama $8,465,600 (1.19%);
Alaska $7,121,300 (1.00%);
Arizona $7,257,400 (1.02%);
Arkansas $10,132,200 (1.42%);
California $77,108,200 (10.83%);
Colorado $9,581,800 (1.35%);
Connecticut $7,121,300 (1.00%);
Delaware $7,121,300 (1.00%);
District of Columbia $7,121,300 (1.00%);
Florida $20,642,800 (2.90%);
Georgia $15,253,300 (2.14%);
Hawaii $7,121,300 (1.00%);
Idaho $7,121,300 (1.00%);
Illinois $ 24,753,200 (3.48%);
Indiana $8,687,500 (1.22%);
Iowa $11,238,700 (1.58%);
Kansas $10,008,100 (1.41%);
Kentucky $10,851,600 (1.52%);
Louisiana $9,949,200 (1.40%);
Maine $7,121,300 (1.00%);
Maryland $7,121,300 (1.00%);
Massachusetts $27,414,400 (3.85%);
Michigan $20,951,400 (2.94%);
Minnesota $11,856,100 (1.66%);
Mississippi $8,271,700 (1.16%);
Missouri $9,574,900 (1.34%);
Montana $7,121,300 (1.00%);
Nebraska $7,121,300 (1.00%);
Nevada $7,121,300 (1.00%);
New Hampshire $7,121,300 (1.00%);
New Jersey $17,347,900 (2.44%);
New Mexico $7,121,300 (1.00%);
New York $45,061,600 (6.33%);
North Carolina $12,859,400 (1.81%);
North Dakota $7,121,300 (1.00%);
Ohio $22,806,200 (3.20%);
Oklahoma $10,224,200 (1.44%);
Oregon $10,567,800 (1.48%);
Pennsylvania $22,404,800 (3.15%);
Puerto Rico $10,225,000 (1.44%);
Rhode Island $7,121,300 (1.00%);
South Carolina $7,669,400 (1.08%);
South Dakota $7,121,300 (1.00%);
Tennessee $9,557,400 (1.34%);
Texas $54,014,400 (7.58%);
Utah $7,121,300 (1.00%);
Vermont $7,121,300 (1.00%);
Virginia $13,895,300 (1.95%);
Washington $19,169,100 (2.69%);
West Virginia $7,121,300 (1.00%);
Wisconsin $9,548,400 (1.34%);
Wyoming $7,121,300 (1.00%);
Other Areas \3\ $2,350,000 (0.33%)
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\3\ Other Areas include: the Virgin Islands, American Samoa,
Guam, and the Commonwealth of the Northern Mariana Islands.
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Submission to Congress and the General Accounting Office
Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business
Regulatory Enforcement Fairness Act of 1996, EPA submitted a report
containing this rule and other required information to the U.S. Senate,
the U.S. House of Representatives and the Comptroller General of the
General Accounting Office prior to publication of the rule in today's
Federal Register. This rule is not a ``major rule'' as defined by 5
U.S.C. 804(2).
ADDRESSES: A copy of the public comment received regarding this
allotment formula is available for review at the EPA Drinking Water
Docket, 401 M ST, SW, Washington, DC 20460. For access to the docket
materials, call (202) 260-3027 between 9:00 a.m. and 3:30 p.m. The
allotment formula results for fiscal year 1998 will be published in the
Federal Register once national set-aside amounts have been finalized.
FOR FURTHER INFORMATION CONTACT: Mr. Clive Davies (202) 260-1421.
Dated: March 12, 1997.
Robert Perciasepe,
Assistant Administrator for Water.
[FR Doc. 97-6827 Filed 3-17-97; 8:45 am]
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