Allocation of Drinking Water State Revolving Fund Monies
[Federal Register: May 18, 2001 (Volume 66, Number 97)]
[Notices]
[Page 27648-27651]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18my01-35]
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ENVIRONMENTAL PROTECTION AGENCY
[FRL-6978-7]
Allocation of Drinking Water State Revolving Fund Monies
AGENCY: Environmental Protection Agency.
ACTION: Notice.
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SUMMARY: The 1996 Safe Drinking Water Act (SDWA) Amendments established
a Drinking Water State Revolving Fund (DWSRF) program and authorized
$9.6 billion to be appropriated for the program through fiscal year
2003. Congress directed that allotments for fiscal year 1998 and
subsequent years be distributed among States based on the results of
the most recent Drinking Water Infrastructure Needs Survey.
In this notice, the Environmental Protection Agency (EPA) is
releasing a revised allocation for DWSRF monies among States in
accordance with the results from the most recent Drinking Water
Infrastructure Needs Survey (i.e., the 1999 Drinking Water
Infrastructure Survey) which was released on February 28, 2001. This
revised allocation affects DWSRF program appropriations for fiscal
years 2002 through 2005.
Beginning in fiscal year 1998, EPA established a formula which
allocates funds to the States based directly on each State's
proportional share of the total State need, provided that each State
receives a minimum share of one percent of the funds available to the
States, as required by the SDWA. EPA has made the determination that it
will continue to use this method for allocating DWSRF funds. The
findings from the 1999 Needs Survey will change
[[Page 27649]]
the percentage of the DWSRF monies received by some States relative to
their current allotments. This change reflects an increase or decrease
in these States' share of the total State need.
DATES: This notice is effective May 18, 2001.
FOR FURTHER INFORMATION CONTACT: For technical inquiries, contact
Veronica Blette, Drinking Water Protection Division, Office of Ground
Water and Drinking Water (4606), 1200 Pennsylvania Avenue NW.,
Washington, DC 20460. The telephone number is (202) 260-3980 and email
address is blette.veronica@epa.gov. Copies of this document and
information on the Drinking Water Needs Survey and the DWSRF program
can be found on EPA's Office of Ground Water and Drinking Water website
at http://www.epa.gov/safewater.
SUPPLEMENTARY INFORMATION:
Background
The 1996 Safe Drinking Water Act (SDWA) Amendments established a
Drinking Water State Revolving Fund (DWSRF) program and authorized to
be appropriated $9.6 billion for the program through fiscal year 2003.
Since 1996, Congress has appropriated $4.4 billion for the DWSRF
program. Congress directed that allotments for fiscal year 1998 and
subsequent years be distributed among States based on the results of
the most recent Drinking Water Infrastructure Needs Survey (SDWA
section 1452(a)(1)(D)(ii)), which must be conducted every four years.
The first survey, which reflected 1995 data, was released in February
1997.
The 1999 Drinking Water Infrastructure Needs Survey was conducted
over the last two years with the cooperation of the States. States
participated in the development of the survey methods, documentation
requirements, and the Report to Congress, which was released on
February 28, 2001 (EPA 816-R-01-004). The survey examined the needs of
approximately 4,300 water systems and used these data to extrapolate
needs to each State. The survey included all of the nation's 1,111
largest systems (those serving over 40,000 people) and a statistical
sample of systems serving fewer than 40,000 people. EPA conducted site
visits to approximately 600 small community water systems and 100 not-
for-profit noncommunity water systems. The sample design produces a
statistically valid State-by-State estimate of need.
The 1999 Needs Survey presents State-by-State needs in several
ways. For each State, the Needs Survey provides a bottom-line estimate
of the total need, which reflects the capital costs for all drinking
water infrastructure projects allowed for inclusion in the Survey. The
Needs Survey also presents capital needs for each State by system size,
by category of need (i.e., treatment, distribution and transmission,
storage, source, and ``other''), by existing SDWA regulation, and by
current and future need. A current need is a project needed now to
protect public health, while a future need is a project that will be
needed over the next 20 years.
The 1999 Needs Survey found that the total national need is $150.9
billion (Table 1). This estimate represents the needs of the
approximately 55,000 community water systems (CWS) and 21,400 not-for-
profit non-community water systems (NCWS) that are eligible to receive
DWSRF assistance. These systems are found in all 50 States, the
District of Columbia, Puerto Rico, on American Indian lands and in
Alaska Native Villages, and the Virgin Island and Pacific Island
territories.
Table 1.--1999 Drinking Water Infrastructure Needs Survey 20-Year Needs
------------------------------------------------------------------------
Need
Type of need (billions)
------------------------------------------------------------------------
States.................................................... $139.0
Territories............................................... 0.4
American Indian and Alaska Native Villages................ 2.2
Costs for Proposed and Recent Regulations................. 9.3
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Total National Need..................................... 150.9
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The total national need also includes $9.3 billion in capital needs
associated with recently promulgated and future regulations, as
identified in EPA Economic Analyses accompanying the rules. Although
these needs are included in the total national need, they were not
apportioned to the States based upon the unanimous recommendation of
the State representatives who participated in the survey design. The
States expressed concern that the methods available for allocating the
costs of these regulations would not represent the true costs of
compliance on a State level.
The total State need, which is the figure that EPA will use to
calculate the allotment formula, includes only the needs of the 50
States, the District of Columbia, and Puerto Rico. The 1999 Needs
Survey estimates that the total State need is $139.0 billion.
Allocation Method
On October 31, 1996, EPA solicited public comment on six options
for using the results of the first Drinking Water Infrastructure Needs
Survey to allocate DWSRF monies to the States (61 FR 56231). On March
18, 1997, EPA announced its decision to allocate DWSRF monies for
fiscal years 1998 through 2001 appropriations based on each State's
proportional share of the total eligible needs for the States as
derived from the 1995 Needs Survey (62 FR 12900). EPA has made the
determination that it will continue to use this method for allocating
DWSRF funds for fiscal years 2002 through 2005 appropriations utilizing
the results of the 1999 Needs Survey.
The funds available to the States will be the level of funds
appropriated by Congress, less the national set-asides, which includes
an allocation for American Indian and Alaska Native Village water
systems. Of the funds available to States, the SDWA includes specific
allocations for the Pacific Islands, the Virgin Islands, and the
District of Columbia.
Each State will receive an allotment of DWSRF funds based on each
State's proportional share of the total State need ($139.0 billion),
provided that each State receives a minimum allocation of one percent
of the funds available to States, as required by the SDWA. The total
need calculated for each State is the survey's bottom-line and the
simplest way of allocating DWSRF grant funds among States.
The total State need includes all documented projects collected by
the Needs Survey. In general, a project was included in the Needs
Survey if project documentation demonstrated that meeting the need
would address the public health objectives of the SDWA. The total State
need includes projects needed now and over the next 20 years in four
general categories: treatment, source, storage, and transmission and
distribution. The total State need excludes capital projects that are
ineligible for DWSRF assistance, such as projects solely for growth and
dams, and the capital costs associated with recently promulgated and
future regulations.
The formula based on the total need makes no distinction between
the four categories--that is, it assigns an equal weight to all
categories of need. Also, projects to correct imminent public health
threats (e.g., replacing a deteriorated filter plant) are given the
same weight as less critical needs (e.g., replacing a storage tank that
is expected
[[Page 27650]]
to reach the end of its useful life in five years).
Consideration of Alternative Allocation Methods
The method that EPA uses to allocate funds to States is based on
each State's share of the total State need. Several States have
explicit restrictions against providing funding to privately-owned
enterprises. Such restrictions may be the result of statutory or
constitutional provisions at the State level or may be due to policy
decisions made by the State program. The constitution or statutes of 17
States prohibit the provision of DWSRF monies to privately owned
systems.
EPA had been asked by some stakeholders to consider changes to the
allotment method to account for restrictions in some States that limit
the provision of DWSRF assistance to publicly owned water systems.
These stakeholders expressed the opinion that the allocation for these
States should only consider the total need associated with publicly
owned water systems that are eligible to receive DWSRF monies. They
proposed that capital needs associated with privately owned water
systems (determined thorough inventory information) be deducted from
these States's total need estimates, although, as required by the SDWA,
each State (even those States restricting privately-owned water systems
from funding) would receive at least one percent of the funds available
to States. Stakeholders felt that basing the allotment formula on
whether States restrict DWSRF funding would ensure that States receive
an allotment directly in proportion to their total needs eligible for
assistance from the State.
EPA has reviewed the statutory language authorizing the program and
determined that State DWSRF allotments should be based on the needs
reported in the most recent needs survey which must assess ``capital
improvement needs of all eligible public water systems''. The total
State need collected through the survey represents the needs associated
with publicly and privately-owned community water systems and non-
profit noncommunity water systems, therefore these needs must be
included in determining the allotment of funds.
It is important to note that in reviewing the issue, EPA found that
some States with explicit restrictions are working to make changes to
legislation or are working to identify alternative methods of assisting
privately-owned systems. Some States are working to develop funding
mechanisms which would enable them to provide DWSRF assistance to these
water systems. Other States are using set-aside funds to provide
technical assistance or are helping privately-owned systems obtain
assistance from other State or Federal sources. EPA also found that
some States that had the authority to provide assistance to privately-
owned utilities had not done so. It is likely that any attempt to
remedy inequities through the allotment method would itself be
inequitable.
Although we are not making changes to the allotment formula, the
Agency will continue to monitor States with respect to their decisions
to fund privately-owned systems to ensure that the program maximizes
benefits to public health. The Agency will also continue to work to
assist States in working with privately-owned systems by providing
financial management training on the mechanics of applicant credit
evaluation and facilitating the dissemination of information between
States.
Allocation of Monies
Table 2 contains each State's expected DWSRF allotment based on an
appropriation of $823,185,000 and national set-aside assumptions. The
appropriation amount is based on the President's budget request of
$823,185,000 for fiscal year 2002. The national set-asides for fiscal
year 2002 include funds for American Indian and Alaska Native Village
water systems at the level of 1.5 percent of the total appropriation.
(SDWA Section 1452(i)). This comes to $12,374,700 for Indian Tribes and
Alaska Native Villages. Additional national set-asides for fiscal year
2002 include $2,000,000 for monitoring for unregulated contaminants and
$30,000,000 for operator certification expense reimbursement grants. If
funds are appropriated for the DWSRF at the level of $823,185,000
million and if the anticipated national set-asides do not change, the
total funds available to the States, the District of Columbia and
Territories would equal $778,837,300. Because the percentages are based
on the total funds available for allotment to the States, they can be
used for general 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. EPA will annually notify each State
of their allotment from a specific fiscal year's appropriation after
the final budget has been passed.
The findings from the 1999 Needs Survey will change the percentage
of the DWSRF monies received by some States when compared to their
current percentages. This change reflects an increase or decrease in
these States' share of the total State need. The variation in these
States' needs occurred principally as a result of the data submitted by
individual water systems, but also in part due to refinements in the
survey methods. With the collection of data from nearly 4,300 water
systems and over 80,000 projects submitted, a change in some States'
allotments represents an inevitable consequence of conducting a survey
of this scale.
Table 2.--Distribution of Drinking Water State Revolving Fund Allotments
------------------------------------------------------------------------
Amount
State Percent allotted
------------------------------------------------------------------------
Alabama..................................... 1.00 $7,788,400
Alaska...................................... 1.00 7,788,400
Arizona..................................... 1.13 8,826,900
Arkansas.................................... 1.08 8,431,800
California.................................. 10.24 79,756,000
Colorado.................................... 1.65 12,886,000
Connecticut................................. 1.00 7,788,400
Delaware.................................... 1.00 7,788,400
Florida..................................... 2.34 18,223,300
Georgia..................................... 1.58 12,331,600
Hawaii...................................... 1.00 7,788,400
Idaho....................................... 1.00 7,788,400
Illinois.................................... 3.73 29,064,700
Indiana..................................... 1.17 9,144,900
Iowa........................................ 1.84 14,299,600
Kansas...................................... 1.15 8,931,800
Kentucky.................................... 1.22 9,483,500
Louisiana................................... 1.00 7,788,400
Maine....................................... 1.00 7,788,400
Maryland.................................... 1.16 9,044,200
Massachusetts............................... 3.58 27,843,600
Michigan.................................... 4.10 31,920,400
Minnesota................................... 1.98 15,429,600
Mississippi................................. 1.00 7,788,400
Missouri.................................... 1.45 11,318,800
Montana..................................... 1.00 7,788,400
Nebraska.................................... 1.00 7,788,400
Nevada...................................... 1.00 7,788,400
New Hampshire............................... 1.00 7,788,400
New Jersey.................................. 2.30 17,930,500
New Mexico.................................. 1.00 7,788,400
New York.................................... 7.75 60,382,900
North Carolina.............................. 1.76 13,676,100
North Dakota................................ 1.00 7,788,400
Ohio........................................ 3.05 23,742,400
Oklahoma.................................... 1.55 12,038,200
Oregon...................................... 1.76 13,684,800
Pennsylvania................................ 3.22 25,080,100
Puerto Rico................................. 1.33 10,388,900
Rhode Island................................ 1.00 7,788,400
South Carolina.............................. 1.00 7,788,400
South Dakota................................ 1.00 7,788,400
Tennessee................................... 1.01 7,877,800
Texas....................................... 7.70 59,989,300
Utah........................................ 1.00 7,788,400
Vermont..................................... 1.00 7,788,400
Virginia.................................... 1.38 10,762,600
Washington.................................. 2.47 19,220,200
[[Page 27651]]
West Virginia............................... 1.00 7,788,400
Wisconsin................................... 1.98 15,423,400
Wyoming..................................... 1.00 7,788,400
District of Columbia........................ 1.00 7,788,400
Territories................................. 0.33 2,570,200
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Total..................................... 100.00 778,837,200
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Dated: May 4, 2001.
Diane C. Regas,
Acting Assistant Administrator, Office of Water
[FR Doc. 01-12579 Filed 5-17-01; 8:45 am]
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