United States
Environmental Protection
Office of Water
Washington, D.C.
EPA 800-R-94-001
February 1994
                                         Printed with Soy/Canola Ink on paper that
                                         contains at least 50% recycled fiber

The President's Clean Water Initiative was developed through the coordinated
effort of the following federal agencies:

                      Office of Environmental Policy
                      Council of Economic Advisors
                    Office of Management and Budget
                        National Economic Council
                     Environmental Protection Agency
                        Department of Agriculture
                        Department of Commerce
                         Department of Defense
                         Department of Energy
                 Department of Health and Human Services
                         Department of Interior
                         Department of Justice
                      Department of Transportation

Printing of this document is provided courtesy of the Environmental Protection

                    TABLE OF CONTENTS


Expanding Eligibility for SRF Funding	   1
Clarifying/Limiting the Eligibility
     of Certain Activities for SRF Funding	   3
Modifying Project Requirements	   4
Project Targeting and Priority Setting  	   6
Meeting the Needs of Disadvantaged Communities	   8
Capitalization Options for SRF Program	  11
Permit Fees for the NPDES,
     Pretreatment and Sludge Programs   	  13
Section 404 Permit Fees	  16
Laboratory Performance Evaluation Fees 	  17


Pollutant Discharge Prohibitions 	  19
Water Quality Criteria Development  	24
State Water Quality Standards Reviews	27
Antidegradation 	• • • •  31
Pollution Prevention in the Effluent Guidelines Program 	34


Nonpoint Source Pollution in Brief	 .  35
Strengthened State Programs	37
Funding and Financing  	42
Federal Lands and Activities	44
Irrigation Return Flows	45


Watershed Management in Brief   	47
State Watershed Programs	49

Minimum Elements for a Watershed Management Plan  	54
The Federal Role in Watershed Management  	57
Incentives for Watershed Management  	61
Watershed Market-Based Approach  	66
Restoration  of Urban Waters  	70


Civil Judicial Enforcement Authorities  	72
Federal Facilities	78
Criminal Enforcement  	82
Improving Administrative Enforcement	85
Clean Water Act Citizen Suits	90
CWA Imminent and Substantial Endangerment Provision  	93
CWA §311:  Oil and Hazardous Substances	96
Contractor Listing	98
Supplemental Environmental Projects	  100
Environmental Audits  	  102
Miscellaneous and Technical Issues	  104


Permitting in Brief	  109
Pollution Prevention in NPDES  Program	  111
Innovative Technology Incentives	  113
Storm Water Programs  	  116
Combined Sewer Overflows	  123
Pretreatment	  125


Background   	  128
Strengthening State and Tribal Programs	  129
Inventory of Waters  	  131
Coordination of Water Monitoring	  133
Relationship of Other Agency Research
and Monitoring Activities to the Clean Water Act  	  135
                                 -  11 -


National Estuary Program Management Plans	  137
The National Estuary Program
     and the  Watershed Protection Program	  139
Ground Water  and Drinking Water Protection	  141
Increasing Tribal Assumption of EPA Water Programs  	  144
Water Use Efficiency	  147
Market-Based  Approaches	  149
Benefits and Costs of the Reauthorized CWA	  150
                                -  111 -


Just as water is vital to human life, the imperative for clean water touches closely the
life of every American.

Every American knows that clean water is essential, whether we draw a living on or
from our waters, seek recreation in them, or look to them as a scenic setting for a
home, a workplace or  a site for spiritual nourishment.  Water pollution remains
consistently among the public's top environmental concerns. A 1993 Times Mirror
poll found that 77% of the public believes that government should do more to control
such pollution.

President Clinton proposes a clean water agenda that will  energize our efforts to
secure clean and healthy water, while making simpler and more efficient State and
local governments' central role in this effort.   The President's  agenda strives for
support of all affected sectors:  State, local and tribal governments; environmental,
agricultural, civic and business groups.

The Need for Action

The Clean Water Act (CWA) has dramatically  improved water quality since 1972.
Still, serious quality threats grow unchecked, and heightened vigilance is required for
other, persistent problems. Recent State assessments show 30 percent of rivers, 42
percent of  lakes, and 32 percent of  estuaries surveyed continue  to be degraded,
mainly by silt and nutrients from farm and urban runoff, combined  sewer overflows
(CSOs)  and municipal sewage. 740 million pounds of toxic chemicals pour into
waterways and municipal sewers each year. Localized ground-water contamination
is widespread.

Approximately 1,300  waterbodies  have been so degraded by  pesticides, organic
chemicals,  and  metals that  State  authorities have had  to  limit the public's
consumption of the fish and shellfish found therein.   Bottom  sediments are
contaminated in more than 1,000 waterways nationwide.   Bacterial contamination
shrinks our shellfish beds.   Beach  closures  diminish  recreation for  thousands.
Commercial fishing harvests  in U.S. rivers have decreased by over 80 percent.
Between 60 and 80 percent of riparian corridors have been degraded.
                                   -  iv  -

 A New Vision for Water Quality in America

       "We must pass a new Clean Water Act with standards for nonpoint source
       pollution and incentives to develop ways to reduce and prevent polluted runoff
       at its source."
                                    — President Clinton
                                      "A Vision of Change for America"

 An updated CWA can tackle these problems through a new, more targeted approach.
 Through "designer partnerships" among Federal, State, and local governments, private
 landowners, industry  and the  public, we can craft flexible, innovative,  efficient
 solutions  to  water  quality problems,  increasingly making watersheds the basis of
 analysis and action.

 Here are the key objectives of our policy:

 >     to reduce nonpoint source pollution (NPS) through clear performance objectives,
       and by giving incentives,  information and technical aid to farmers, developers,
       foresters and others, so they can lessen the damaging pressure their activities
       exert on aquatic resources;

 >     to streamline and strengthen regulatory and enforcement authorities to assure
       a prompt,  effective and  appropriate response to environmental and health

 >     to slash unfunded mandates, increase flexibility and cut red tape for States,
       municipalities and the private sector, so resources are targeted to the  most
       serious quality problems;

 *     to improve and maintain the municipal wastewater infrastructure, as too many
       areas find  their sewers  and treatment plants inadequate to protect water

 >     to encourage dischargers  to move beyond compliance with the letter of the law
       to innovation that will prevent pollution, promote efficiency and protect living
       resources;  and

 >    to improve quality of life for all, regardless of ethnicity, race or income, leaving
       no  group  bearing a  disproportionate  burden of  the consequences  of
      environmental pollution.

 In sum, the Clinton Administration is asking Congress, in reauthorizing the CWA, to
enter a new era in environmental protection. Instead of simply controlling the end of
the discharge pipe, we propose to protect and conserve our water, aquatic habitats,
                                    -  v  -

and the living resources within, through an integrated, holistic approach, based on
natural watersheds, and aimed at reducing pollutants from all sources that impair
water quality.  This vision for water quality is powerful and wide enough to realize
other vital national priorities, such as improving wetlands programs, growing jobs, and
addressing key border issues in the new U.S.-Mexico trade agreement.

The CWA has greatly  improved water quality.  However,  emerging threats and
persistent problems alike require new vigilance. The Clinton  initiative will:

Strengthen State nonpoint source programs by including  enforceable minimum
controls in selected waters

+     In conjunction with  other Federal agencies and States, EPA should establish
      national guidance for best available management measures to control nonpoint
      pollution. Measures should consider costs and be broad and flexible enough for
      local tailoring.

>•     States  should  apply  their  nonpoint programs,  including  best  available
      management measures, to existing nonpoint sources in targeted waters whose
      quality is impaired,  threatened or deserves special protection, and to new
      sources State-wide.  Site-specific plans and adaptations to  local soils and
      climates should be encouraged if they are as  effective as EPA's guidance.

+     After an initial five-year implementation period, another five years should  be
      allowed for any added controls needed to meet water quality standards. States
      or if necessary the Federal government should ensure compliance with State-set
      management measures.  Federal agencies must carry out State NPS programs
      on Federal lands just as non-Federal entities do elsewhere.

Establish more current and comprehensive water quality standards, including a broader
effort to control or prohibit the multi-media release of  the most persistent toxic

+     States should implement water quality standards programs in cooperation with
      EPA and other  Federal  agencies.    EPA   should  develop  criteria and
      implementation  guidance based on  current  science,  and should  set such
      development priorities  based on risk and effectiveness.  States should  be
      required to expeditiously adopt standards consistent with EPA criteria. Criteria
      should be automatically converted into State standards if the State fails to act.
      The CWA should also require protection against unacceptable degradation of
      special value waters.
                                   - vi  -

 >•    Where release of the most toxic, bioaccumulative and persistent pollutants
      poses substantial health and environmental risk and contributes to water quality
      impairment, EPA should have broader ability to control or prohibit them.

 Strengthen Federal, State, and private citizen enforcement of the requirements of the
 Clean Water Act

 >    The Administration proposes Federal and State authorities for more efficient,
      effective,  innovative  enforcement,  to deter  violations   and  encourage
      compliance.  We would streamline  and strengthen enforcement provisions,
      involving all criminal, civil, administrative, and enforcement options, and make
      CWA enforcement powers  consistent with comparable environmental laws.

 »•    The Administration  will  also strengthen  citizen enforcement — which
      complements government enforcement.

 »•    Compliance should begin at home. The Federal government must obey the Act,
      and so Congress should expand the waiver of sovereign immunity and establish
      means for Federal enforcement against Federal facilities.

Actively promote ecosystem protection and pollution prevention

 >    Federal agencies should, on  request, help States, Territories, and eligible Tribes
      with all appropriate work on watershed planning and management. We propose
      that States, Territories, and Tribes that choose to engage fully in watershed
      management  would have greater flexibility to (1) tailor NFS  management to
      local conditions; (2) focus point source program resources on critical problems
      in key watersheds; (3) address interconnected ground water and surface water
      concerns; (4) weigh trading opportunities between nonpoint and point sources;
      (5) target the State Revolving Fund (SRF) and CWA grants to eligible, priority
      watershed  activities, including riparian restoration;  and  (6) establish  high
      priority  for federal  funds  and technical aid for wetlands  activities  (e.g.,
      identification, mitigation banks, functional evaluations and restoration plans).

>     Complementing  this  holistic approach, the  Act should allow NPDES and
      pretreatment  programs to require industrial dischargers to consider pollution
      prevention  approaches, to  help  encourage  recycling and pollutant source
      reduction. The effluent guidelines program should be streamlined, and regularly
      updated to focus on reducing the greatest health and environmental  risks.
                                  - vii -


The CWA rigidly requires all municipalities and industries to meet technology and
water quality standards for combined sewer overflows and storm water discharges.
The Clinton initiative will:

Reduce by four-fold the potential cost of storm water controls while achieving water
quality benefits by targeting actions to select urban areas

>     Wet weather runoff from storrn water discharges can severely degrade water
      quality, but  CWA mandates must address this  problem more  fairly and
      effectively.  Point source (National Pollutant Discharge Elimination System, or
      NPDES) permits  now regulate such runoff from most  industries and from
      municipalities with populations over 100,000.  The Act should apply permit
      requirements ~  using  targeted  controls  -- to  certain urban  areas with
      populations  of 50,000 or greater,  ending requirements for smaller  cities.
      Remaining sources -- smaller cities, commercial enterprises, and light industries
      --  should be addressed  by enhanced  State  IMPS programs  or  watershed

>     Before requiring  compliance with water quality standards,  EPA and States
      should be allowed first to require best management measures for municipal
      storm  water discharges.  Where municipalities choose to  regulate industrial
      storm  water discharges to storm sewers, they should be allowed to displace
      EPA or State regulation.   Finally, to encourage prevention of storm water
      pollution, industrial facilities that are permanently sheltered from wet weather
      should be exempted from NPDES storm water permits.

Reduce by four-fold the potential cost of combined sewer overflow controls while still
achieving designated water uses

»>     Representatives  of EPA,  the States, cities and environmental groups have
      agreed on a new policy  on CSO controls.  Both costs and  environmental
      impacts in this area are very high.  The draft policy should be codified in the
      Act. By aiming resources at the most critical problems, the policy will produce
      cost-effective benefits,, particularly for commercial fishing and urban recreation.
      We also recommend removing the SRF's 20 percent funding  limit on fixing
      CSOs to provide the critically needed funding for developing CSO controls.
                                  - viii -


 The Act fails to encourage innovative technologies and market-based approaches that
 can achieve environmental goals more efficiently.  The Clinton initiative will:

 Give permittees more compliance time if they adopt innovative technologies

 >     EPA and States should be  able to give NPDES permittees enough time and
       flexibility to adopt new technologies that offer more effective, cheaper pollution
       prevention or control than current  methods.   EPA could explore national
       standards for discharges from Department of Defense vessels as an incentive
       to develop innovative technology for marine pollution controls.

 Encourage appropriate trading as a way to achieve cost-effective attainment of water
 quality standards within a watershed

 >     Market-based approaches,  including certain types of pollutant trading and
       State-imposed,  risk-based effluent charges, may help the efficient attainment
       of water quality goals.   When a water body receives point and nonpoint
       pollutants with  similar effects, pollutant sources may be able to reallocate or
       exchange their tasks of pollution reduction.

 *•     However, in any trading  scheme, point sources must continue to  meet
       technology-based requirements. Because toxic pollutants often have localized
       effects, trades must consider such possible effects  near the discharges and
      throughout the watershed. The CWA should recognize and encourage trading
       and State-imposed effluent charges as means to improve water quality and
      should authorize demonstration programs to explore the benefits of trading.


The Act now impedes State action on priority problems due to overly cumbersome
procedures and statutory priorities that do not match State priorities.  The Clinton
initiative will:

Allow States to establish new management frameworks that focus resources on the
most critical problems in priority watersheds

*•     States, Territories and Tribes that undertake watershed management should
      convene  teams comprised  of individuals from  all  affected governments,
      communities, and the private sector.  Each team would define environmental
      objectives, identify causes of water ecosystem degradation, and develop and

                                  - ix  -

      implement Watershed Management Plans.  Among other things, plans  will
      contain voluntary and mandatory actions to reduce point and nonpoint source
      pollution, improve water quality, and protect and restore aquatic habitats.

*•     EPA,  with other Federal agencies,  will contribute guidance, technical  and
      financial aid, and periodic review of  State watershed management programs.
      These "designer partnerships" on a watershed basis will break the one-size-fits-
      all paradigm.

Authorize multi-purpose water grants for States that do watershed management, with
flexibility and streamlined administrative requirements

>     As an incentive for the watershed  approach, the CWA  should consolidate
      existing State grants into one multi-purpose water grant (excluding the SRF).
      States could manage Federal funds through a single workplan, insuring basic
      activities enabling States to shift funds to high priorities.

Expand SRF funding eligibility to a wider range of activities

>     The SRF authorization expires this year. The Act should reauthorize the  SRF
      and clarify that SRF eligibility is limited to municipalities, but should expand
      their  project eligibility  to include  riparian habitat restoration   in priority
      watersheds; control of all municipal pollution sources; and programs promoting
      water conservation and  pollution prevention.  Congress should  streamline
      program requirements to reduce costs.

The Administration recognizes that we can solve our water quality problems only with
the synergism of partnerships throughout the Nation. Pooling our skills and resources,
we will maximize environmental and economic benefits.  Reauthorization of the CWA
is a timely opportunity  to spur national  policy  towards designer partnerships,
empowered to try collaborative solutions. Partnerships must also include strategies
to help State and local governments  surmount the financial challenges they face in
achieving CWA goals.

As a part of this effort, EPA should substantially consult with and involve State and
local  governments  which are co-regulators in the relevant regulatory  and other
decision-making processes under the CWA.  This clean water initiative creates a
statutory environment in  which that consultation  and  involvement can occur.
Specifically, the Clinton initiative will:
                                    - x  -

Building on a Clean Air Act idea, help States collect sufficient clean water program
funds through permit fees and other means

>     States must adequately fund authorized programs through State appropriations,
      other funding,  or permit fees to recover the costs of the NPDES, pretreatment
      and sludge programs.  EPA should be authorized to collect the fee if the State
      does not  collect sufficient funds, and  wherever EPA operates the NPDES
      program. Funding should cover the costs of developing and administering point
      source regulations, standards, guidance, and permits;  monitoring compliance
      and quality assurance; ambient monitoring; developing and maintaining an
      inventory  of regulated entities; and  developing and  administering any fee

>•     Increased  permit fees should  also be  imposed when the  Army Corps of
      Engineers  or authorized States issue Section 404 permits. These fees would
      recover program costs,  enhance program efficiency  and facilitate wetland
      protection. Fees should  minimize financial effects on small landowners.

Capitalize the SRF to ensure  its  long term integrity, and streamline the  SRF
administrative process

>     The SRF has been crucial to improving municipal sewage  treatment.  The
      Administration proposes authorization levels of  $2  billion per year through
      1998, then falling until 2003 as SRF annual repayments reach a stable level of
      about $2 billion.

Support Indian Tribes which seek to develop and  administer integrated water quality

*     The CWA should foster assumption of water quality programs by Indian Tribes.
      EPA should be authorized to provide a broad program grant for Tribes to
      develop "integrated" water quality programs tailored to their specific needs, and
      boost to 1 % Tribal set-asides in Title VI treatment works construction funding.

The Clinton initiative recommends CWA changes to enhance protection of all the
people from environmental hazards.  It will:

Allow States to use the SRF for disadvantage^ community needs

>     While the long-term integrity of the SRF must be preserved, the Administration
      also  believes that some  disadvantaged  communities, small or large, need
                                   -  xi -

      particular help. We propose to allow States to use up to 10% of each year's
      loan volume for negative interest loans (down to -2%), or similar assistance.
      This aid should be given only if a community demonstrates that it cannot meet
      the State affordability criteria even after exhausting  all  other options for
      financial assistance.

Improve quality of life for all, regardless of ethnicity, race or income, leaving no group
bearing a disproportionate burden of the consequences of environmental pollution

>     When setting CWA program priorities, EPA must involve the public to ensure
      consideration of all population groups.  EPA should be authorized to develop
      guidance on fish advisories to ensure protection of people in cultural groups
      who consume more fish than the national average, such as subsistence fishers.

>     Also, the new framework for watershed management proposed here would
      advance consideration of critical problems in priority watersheds regardless of
      race, ethnicity or income.  Watershed activities should engage all affected
      groups, empowering local communities through partnerships.  Particularly, the
      CWA should give urban watersheds high priority, and authorize SRF use for
      riparian restoration in such watersheds.
                                   - xn  -


                CHAPTER  1--FUNDING ISSUES
Under current law, a State Revolving Fund (SRF) established under title VI of the
Clean Water Act (CWA) can provide assistance for the construction of publicly-owned
treatment works (POTWs) [§212], the implementation of State  NFS management
programs (§319), and the development and implementation of estuary conservation
and management plans (§320).  The range of eligible activities  under the current
program is already fairly broad, and includes certain high-priority activities such as
CSO abatement and storm water management.  Since the program's inception  in
1987, the issue of whether to expand the types of projects and activities eligible for
SRF assistance has received a great deal of consideration.


In recent years, the Administration's understanding of the types of impairments to the
Nation's waterways and their costs, has improved. The Administration has examined
a variety  of proposals  for expanding eligibility under the SRF  program.   These
proposals range from clarifying and expanding eligible activities related to water
quality management to transforming the program into a comprehensive mechanism
for addressing a broader range of environmental management issues.

Unfortunately,  the needs for currently eligible activities  far exceed available SRF
capitalization.  In addition, Federal budget  realities restrict our options.  Moreover,
many projects and activities proposed for funding under the SRF program are already
eligible to receive assistance from other sources of Federal funding.  For example,
coastal NFS plans are eligible for grants under the Coastal Zone Management Act.


>     The Administration recommends small but significant changes to eligibility
      under the SRF program that would make the best use of limited Federal funds
      and encourage States1 to address high priority needs.

*•     Restoration  and protection of  riparian  areas in the context of a  publicly-
      administered program should  be eligible  for SRF assistance.   However, this
      would not include the purchase of land.
   throughout this document, "States" means all States, Territories, and eligible
Tribes, as appropriate.

Initial capitalization of a wetlands mitigation bank should be eligible for SRF

SRF eligibility should be expanded to include development and implementation
of water use efficiency activities if the activities are cost-effective alternatives
to expanding treatment capacity for treatment works which are publicly-owned
or managed (for example, measures undertaken by assistance recipients to
install  water saving plumbing fixtures).  SRF assistance for  such activities
should be restricted to systems and be  provided to the  agency or entity
operating a system, not to individual users.  States should be encouraged to
provide incentives to SRF loan applicants to undertake comprehensive water
use   efficiency   studies  and  incorporate   implementation   of  those
recommendations  in SRF funding  proposals.

SRF eligibility should also be available to public authorities to develop and
implement pollution prevention  plans.

Section 201(g)(1) should be modified to remove the restriction on funding of
CSO corrections, storm water controls, and sewer rehabilitation.  The current
restriction for collector sewers (20 percent of the capitalization grant amount)
should remain.

SRF should not be used to replace other Federal funds.
                              -  2  -

                     ACTIVITIES FOR SRF FUNDING


During the current phase of SRF program implementation, a series of issues has arisen
regarding  the  appropriateness  of  providing SRF  assistance  for certain  kinds  of
activities.  A number of issues also have arisen with respect to the eligibility of various
private parties  to  receive SRF assistance.  As a result,  the Administration has
considered whether SRF-eligible activities should be limited in some way based on the
purposes,  benefits, or ownership (i.e., public vs. private) of such activities.


Currently,  funding of NPS management activities under the SRF is relatively unlimited.
Based on our interpretation of title VI and its legislative history, the Administration has
concluded that any activity that is included in a State's federally-approved §319 plan
is eligible for SRF assistance regardless of relative priority among other projects in the
State or the project's  contribution  to  achieving  water quality or public  health
objectives.  In some cases,  while a particular  project would provide water quality
improvement, that purpose may be secondary to other project purposes.

The eligibility of various private parties to receive SRF assistance has emerged as  an
issue most prominently  in recent years, with the completion of NPS management
plans and the  movement  away  from  a sole focus  on  traditional POTWs.
Consequently, the  Administration has  questioned whether  to  limit  SRF-eligible
activities in some way based on ownership (i.e., public versus private).


*•     The Administration  favors restricting eligibility for  SRF assistance only  to
      municipalities.  However, the Administration recommends that the  CWA  be
      amended at §603 to clarify that SRF assistance may be provided to an eligible
      public recipient for  the publicly-owned  portion of a municipal  wastewater
      facility constructed as part of a public-private partnership arrangement.

>     The Administration  favors restricting eligibility  to projects whose  principal
      purpose is directly related to surface water quality improvement, as defined  by
      chemical, physical, and biological parameters.
                                    -  3 -

Title VI applies certain requirements to SRF-funded projects and activities. However,
many small communities cannot take advantage of the SRF because of excessively
burdensome requirements.  States and local communities have urged that certain
requirements be  eliminated or modified to make  the program  more  attractive,
particularly for small or disadvantaged communities. Consequently, the Administration
has considered whether some requirements should be altered.


Most of the requirements that apply to SRF-funded projects are found in  §602(b)(6)
of the CWA. However, §602{b)(6) requires POTW projects that are assisted with SRF
funds "directly made available by" capitalization grants  (i.e., funds  in an amount
equaling the Federal contribution) to comply with certain requirements of title II.
These requirements (known as "title II requirements") include requirements to consider
alternative technologies, recreational  uses, and value engineering, for example.

According to State and local officials, the title II requirements increase project and
State administrative costs and impede decision-making flexibility. These requirements
are particularly burdensome to small communities. In addition, these requirements can
delay the time when  Federal funds can be expended for these projects.

Certain title II requirements currently  applicable in the SRF program represent good
management practices that States and localities should follow (e.g, cost-effectiveness
analysis, one-year operational certification, development of user charge systems, and
compliance with the  National Environmental Policy Act).  The rationale for certain
other title II requirements, although valid in  a program of  direct grant assistance to
local communities, may not be as necessary when the assistance is in the form of
loans from States.


The Administration does not support exempting the SRF  program from compliance
with Federal cross-cutting requirements; however, certain requirements should  be
altered or added as follows:

>•     Environmental equity is an important concern for the Administration.  Recipients
      of funds directly made available by capitalization grants for wastewater
      treatment project construction should be required to examine whether the siting
      of these facilities will have a disproportionate impact on people of color and
      low-income communities.
                                   - 4  -

As discussed under the section on expanding eligibilities, remove the title II
restriction on funding of CSO corrections, storm water controls, and sewer

To relieve cost burdens, communities with populations under 10,000, should
be exempted from complying with:
o     The  §201(g)(2)  requirement regarding  consideration  of  alternative
o     The §201(g)(5) requirement regarding consideration of innovative and
      alternative technologies;
o     The   §201(g)(6)   requirement   regarding  consideration   of  open
      space/recreation; and,
o     The §201 (o) requirement regarding encouragement of development of
      capital financing plans.

Section 211, which limits funding for collector sewers to those in an "existing
community," should be amended to make it clear that "existing community"
refers to a community in existence as of  the date of enactment of  CWA
reauthorization.  Although the term  "existing  community"  is not presently
defined in the statute, it is interpreted to mean the date of original enactment
of the CWA in 1972.

Section 218 should be amended to require value-engineering reviews  only for
projects with total costs over $25 million.

Any changes in the applicability of the title II requirements should apply to all
capitalization grant funds for which binding commitments had not yet been
executed as of the date of enactment of the CWA amendments.

SRF projects and  activities that are located  in a State-designated watershed
planning  area  should not be inconsistent  with  State-approved  watershed
management plans.  (See discussion of watershed management.)
                              -  5 -

Should changes be made to encourage better project targeting of SRF funds?


States have structured a wide variety of  programs that direct  SRF assistance to
different priorities and projects.  In some States, SRF loans primarily go to large cities;
other States emphasize assistance to small  towns.  Most States provide the majority
of funding to wastewater treatment works; a few are  attempting to protect water
quality by funding NFS projects.

Under the current SRF program. States must develop project priority lists (PPLs) only
for municipal wastewater facilities.  To be funded under the SRF program, municipal
wastewater facilities must be  on the State PPL; however, unlike the construction
grants program, the State need not fund such projects in priority order. Title VI does
not require the States to develop priority lists for other SRF-eligible activities. Without
a means to consider the relative environmental benefits  of various water quality
approaches, most States  have  not given appropriate consideration to a full range of
water quality management approaches.

Title VI  also includes a  requirement for each State to annually develop an Intended
Use  Plan (IUP) including a discussion  of the SRF's short  and long-term  goals and
objectives and the basis for selection of projects.

In addition, an expansion of the priority systems and project priority lists could foster
more comprehensive water quality management and selection of projects based upon
water quality assessments and comparative environmental benefits and costs.


>     Because funds available  for SRF capitalization are limited compared to needs,
      it is important that States effectively  set priorities  and target assistance to
      direct the Nation's capital towards achieving the greatest environmental results.
      Therefore,  the Administration recommends expanding priority systems and
      project priority lists to  include  all SRF-eligible projects,  including NPS and
      estuary protection activities.

>•     State priority systems should reflect  project contributions to implementing
      recommendations in State-approved  watershed management plans. (See the
      discussion  of the  Administration's  proposal  for a new  CWA provision to
      establish State-wide programs for comprehensive watershed management.)
                                    -  6 -

The current emphasis on State flexibility for funding water quality protection
through the SRF program should be maintained. The Administration does not
support the use of set-asides to foster funding of particular activities which are
eligible for SRF funding. However, at their option, States should be allowed to
establish dedicated pools within overall priority list for particular high-priority
purposes, such as NFS activities.
                               -  7 -



 There are many communities that cannot afford to repay SRF loans even at zero
 percent interest. These communities are not well served by other sources of financing
 because of their limited credit-worthiness.  Projects in small communities and large
 scale CSO projects are often very expensive on a per capita basis. The Administration
 has considered a host of proposals for fundamental changes to the SRF to meet the
 needs of disadvantaged communities.


 Under the current SRF program.  States may provide loans to communities with
 interest rates ranging from zero percent to market rates.  Interest rate policies vary
 widely among the States.  In addition, many  States have prescribed criteria  for
 providing various loan terms to communities dependent on need. States must strike
 a balance between providing attractive and affordable loan terms while, at the same
 time, managing the fund to provide a source of long-term financing.

 Many  States and  groups that represent small and  economically disadvantaged
 communities have recommended that certain changes  be made to the SRF program
 which would enable States to provide more affordable financial assistance. Note that
 not all small communities  are disadvantaged and  not all disadvantaged communities
 are small. However, most of  the disadvantaged communities are under 10,000 in
 population. These communities cannot  rely on "economies of scale" and have less
 access to credit markets than  large cities.

The  Administration  has  considered several   other  financing approaches  for
disadvantaged communities, including: extending loan repayments to 30 years, but
not to exceed the useful life of the facility (title  VI currently limits repayment to 20
years); authorizing principal write-downs or negative interest loans; authorizing States
to make grants under very limited circumstances; and, allowing States to use up to
one percent of the Federal capitalization grant to provide technical assistance to small
and other disadvantaged communities to  help identify low cost technologies, prepare
application materials, and consider other financing options.


      The Rural  Development Administration   (RDA) provides loan  and grant
      assistance to communities with populations under 10,000. The Administration
      and States should improve coordination between the SRF and RDA programs
      to assure selection of projects based on relative financial need, environmental
      benefits and other factors and, as appropriate, promote combinations of grant
                                   -  8 -

and loan assistance to most effectively use available funding sources and to
provide local communities with a broader range of funding choices.

States should  be authorized to provide additional subsidies from the SRF to
disadvantaged communities through a joint  prioritization and  coordination
process between States and RDA for communities with a population less than
10,000.  The value of these subsidies should be limited to ten percent of the
value of loans made in a particular year.

Some States already manage separate loan and grant programs targeted to
meet the needs of small and disadvantaged communities. Other States should
be encouraged to set up similar programs parallel to, but outside of, the SRF
so that the long-term purchasing power of the SRF is not eroded.

States should determine which communities qualify for special subsidies, based
on guidelines established by EPA. Subsidies could include negative interest rate
loans, 30-year repayment periods (or repayment periods that do not exceed the
life of the facility), principal subsidies, loan forgiveness  and similar methods
proposed by the States and approved by EPA.

Any  additional subsidy provided to a disadvantaged community should not
exceed the amount necessary to make the SRF loan affordable, and the amount
of the subsidy to any qualifying community should not exceed the equivalent
of a  negative 2  percent interest rate. Such additional assistance should be
available only to qualifying communities that demonstrate that no Federal or
State grant funds are available for their project and that such additional
assistance is necessary to make the project affordable.

§604{b) should be amended to authorize States to  use  the set-aside of one
percent of the  State  title VI  allotment for technical  assistance to needy

Congress has recognized that the SRF program may  not be an ideal approach
for certain specific jurisdictions, and has provided relief in appropriations acts
by directing EPA to set-aside one-half of one percent of  the  total title VI
appropriation for grants to Indian Tribes (including Alaska Native Villages) for
the construction of municipal wastewater facilities.   The  Administration
believes  that  the  set-aside should be included directly in the authorizing
language and that the amount should be increased  to  one percent.  Grants
should be allowed to cover 100 percent of project costs. Up to  4 percent of
funds available under this set-aside should be available for use to administer
such grants.
                              -  9  -

Appropriations language has also exempted the District of Columbia,  Virgin
Islands, Guam, and certain other territories from the SRF program.  Instead,
these jurisdictions receive their title VI allotments in the form of grants under
title II.  The Administration supports continuation  of this exemption through
incorporation  into the authorizing language.  These jurisdictions should be
allowed to use these funds for any SRF-eligible activities.
                              -  10  -

Federal capitalization of the SRF program is scheduled to end  in 1994,  but the
remaining needs for currently eligible wastewater treatment projects and activities are
enormous.  Because of the success of the program and the size of the remaining
needs, there appears to be strong support for providing additional Federal funds to the
States.  The  Administration has been examining the  changes that are needed  to
assure the long-term  financial  health of  the  SRF program, including  additional
capitalization  beyond Federal authorizations contemplated by the currently proposed
authorization  period.


The recently-released 1992 Needs Survey provides an  estimate of the  costs to build
municipal wastewater  facilities, including  CSO abatement  and  storm water
management, as well as certain NFS management activities.  The total estimated cost,
including both documented and  modeled needs,  is approximately $137 billion.  If
eligible activities are expanded, the total potential demand for  SRF funding could
increase even further.

Based on  the current SRF program  (including assumptions  about  additional
capitalization resulting from leverage bonds), the  Agency estimates that over a 20-
year period States will provide SRF loans at a total value of approximately two and
a  half times the  initial Federal capitalization.    Nonetheless,  without additional
capitalization, there will likely be a major gap between available SRF funds and the
demand for local financial  assistance.

Part of the discussion of future capitalization of the fund hinges upon consideration
of the appropriate role of the Federal government in supporting local communities and
States in addressing water quality infrastructure needs.

Even with the additional capitalization of the SRF program proposed by the President,
the gap  between the cost for communities of complying with  the CWA and the
resources available from Federal assistance programs and other  public funding will
remain vast.  Many communities are looking to private capital to help fill the gap and
many private firms and  investors are anxious to  loan the  funds.  However,
impediments in both the CWA and  EPA regulations prevent the public and private
sectors from working together to meet the Nation's municipal wastewater needs.
                                   -  11 -


 >•    For FY 1994, the Administration recommended an authorization of $1.2 billion
      for the SRF.  From FY  1995-1998, the authorization should increase to $2
      billion annually.

 »•    In order to maintain the ability of States to obtain $2 billion in annual  loan
      activity (including rollover of repayments) and to buttress the disadvantaged
      community program, $1.5 billion should be authorized for the program for FY
      1999, $1.25 billion for FY 2000,  $1 billion for FY 2001, $0.75 billion for FY
      2002, $0.5 billion  for FY  2003, and $0.25  billion for FY 2004.   Federal
      capitalization should end at that point.

 >•    States should be authorized to use an  amount equal to up to 4 percent of the
      capitalization grants or  up to  1/2 percent of the cumulative capitalization
      (Federal grants and State match) for the costs of fund administration.

 >    States should be authorized  to deposit loan closing fees and loan repayment
      surcharges into  their SRF  and to earmark  those funds for administrative
      expenses or technical assistance to disadvantaged communities (such amounts
      cannot now be used for such  purposes because of the four percent cap on
      administrative  expenses calculated on the amount  of Federal capitalization

»•     Statutory impediments to private investment in municipal wastewater facilities
      should be removed.  The Administration recommends defining the phrase
      "publicly-owned treatment works" in the CWA to include,  for non-financing
      purposes,  wastewater facilities that serve the general public,  regardless of
      ownership structure.  The purpose of this provision would be to establish
      equitable permitting and other technical consideration of publicly-owned  and
      investor-owned sewage facilities.  (This is analogous to "public water supply"
      under the SDWA which  refers to the facilities  that  serve  the  public,  not
      facilities that are necessarily owned by public entities.)  Legislative language
      should be constructed to ensure that private entities would  not be eligible for
      SRF assistance. However, as recommended separately by the Administration,
      the CWA should clarify that SRF  assistance  may be provided  to the public
      portion of municipal wastewater  facilities that benefit from public-private
      partnership arrangements.

>•     States  should  continue  to  provide a 20 percent match to  the  Federal
      capitalization grants.
                                   -  12 -

                    PERMIT FEES FOR THE NPDES,

Should permit fees  be specifically authorized in the  CWA to fund the National
Pollutant Discharge Elimination System (NPDES), pretreatment, and sludge programs?


Currently, funding of the NPDES, pretreatment, and sludge programs at the Federal
and State levels is insufficient to fully implement legislative mandates. In the future,
fiscal difficulties will necessitate reduced funding. At the same time, EPA and the
States are expected to consider advances in technology and scientific knowledge in
decision-making at all levels, and to draw upon a wider base of controls to prevent
pollution and multi-media pollution transfer.  Permit fees have been suggested as a
funding  source worthy of consideration.

Existing Fee Systems

Many States have developed wastewater permit fee systems, but few are sufficient
to bring current funding to adequate levels. Current State fee systems vary broadly
in the amount of fee assessed and the schedule or formula used to determine the fee
for an individual facility.  The Federal government at this time has no fee system for
water programs.

The  Clean  Air Act  Amendments of  1990  (CAAA)  required permit programs
administered  by any air pollution  control agency to contain a permit  fee system
sufficient to cover all reasonable costs of developing and administering the permit
program. The CAAA further authorized  EPA to collect  reasonable fees to cover the
costs of administering the provisions of the permit program where the control agency
has not met the requirements for a fee program or is not adequately administering or
enforcing an approved fee program.

Potential Approach for CWA Permit Fees

An approach similar to that in the CAAA could be taken in the CWA.  Specifically, the
CWA could require EPA and the States to develop comprehensive fee systems to
cover all or some fraction of their costs of developing and administering the NPDES,
pretreatment, and sludge programs. These fee systems, alone or in combination with
appropriated funds, program  grants or  other revenue  systems, could  cover, at a
minimum, direct and indirect costs of developing and administering regulations, water
quality standards, guidance, and permits programs; monitoring compliance and quality
assurance; conducting ambientmonitoring; processing waiver applications; developing

                                   -  13  -

and maintaining an inventory of regulated entities; and developing and administering
the fee system.   Requiring collection of 100 percent of the program costs would
eliminate  the need  to annually review  State  revenues  available  through the
combination of fees, appropriations, and grants.

EPA, the States, and any Indian  Tribes that obtain  program authorization could be
given broad authority to fashion their fee structures as they deem appropriate as long
as those fees, in  combination  with other funding, are sufficient to cover program
costs.   EPA and the States may find the greatest benefit in simple fee structures
which are easy to assess and inexpensive to implement. Fee structures that require
extensive accounting could be avoided so that the cost of implementing the fee
system would not wholly disproportionate to the fees collected. EPA, the States, and
Indian Tribes could be given the authority to exempt certain dischargers from paying
any or all of the fee—whether  based on an incentives program or in recognition of
economic or other factors.


>•     Require authorized States and Tribes to develop and implement a fee system
      for  the NPDES, pretreatment, and sludge  programs they are authorized to
      administer.    The requirement  should be written to encourage national
      consistency and to assist the ability  of States to adopt fee legislation.

*•     Authorize EPA to develop fee systems in authorized States and Tribes that do
      not develop approvable fee systems within a stated period of time or in States
      and Tribes  that are not authorized  to administer any or all of the  NPDES,
      pretreatment, or sludge programs. These fees would only cover the costs to
      administer the NPDES, pretreatment, and sludge programs. These fees would
      be deposited in a special fund and be subject to appropriation.

>•     Specify that the  fee systems be  designed to assess fees of permittees and
      industrial users (IDs) that have been issued equivalent control mechanisms by
     the  State (in the case  of  authorized States), Indian Tribe  (in  the case of
     authorized Tribes), or EPA.

>     Require that fee  systems for authorized States and Tribes  be  designed to
     collect, at a minimum, funds sufficient to cover 100 percent of the costs not
     funded through appropriated funds, program grants, or other revenue systems
     to develop and administer all aspects of the NPDES, pretreatment and sludge
     management programs, as  well as other surface water programs (e.g., water
     quality standards, ambient monitoring, total  maximum daily loads)  which
     support the NPDES, pretreatment, and  sludge programs.
                                  -  14 -

Extend broad authority to States, Tribes, and EPA to determine the basis of
their fee structures. Although fee systems are designed to generate revenue
with which to fund the program, States and Tribes should be encouraged to
base fees on pollutant loading or other factors deemed appropriate to provide
economic incentives to promote pollution prevention.  These fees should not
supplant any applicable technology-based or water quality-based effluent limit,
or pollution prevention planning requirements of law.

In the event accumulated fees exceed the amount required above, authorize the
reduction or suspension of fees sufficient to prevent accumulation in excess of
program needs.

Require that the fee systems be re-evaluated every 5 years to determine the
adequacy of established fee systems given changes in the Producer Price Index
as well as changing requirements for the implementation  and administration of
the NPDES, pretreatment, and sludge programs.
                             -  15 -

                       SECTION 404 PERMIT FEES
 Should permit fees be explicitly authorized in the CWA to fund the Section 404


 Since the early 1970s, the Army Corps of Engineers (COE or the Corps) has charged
 Section 404 permit fees  of  $10 for private projects.   All monies  collected  are
 deposited in the U.S. Treasury. In 1990, following completion of a Corps study and
 upon the recommendation of the Department of Defense Inspector General, the Corps
 published for public comment a proposed revised fee schedule. The proposal would
 have increased application fees,  based upon  the associated government  permit
 evaluation costs,  to $2,000 for commercial projects and $500 for noncommercial
 projects.  A fee schedule  also was proposed for other services  such as  wetlands
 delineations and environmental impact statement preparation.

 The proposed revised Section 404 fee schedule proved to be very  controversial, and
 Congress, in both  the 1992 and 1993 Corps appropriations bills, expressly prohibited
 the Corps from expending any funds on completion of the proposed fee regulations.

 Since  that time,  the Vice  President's  National Performance Review  has been
 completed. The final report explicitly addresses existing Section 404 permit fees and
 states that the Corps "has charged only  token fees for its services, collecting only
 $400,000 annually." The report goes on to recommend that, "higher fees would help
 not only taxpayers but Corps customers, because additional revenues could pay for
 faster processing  of applications."


The Administration  recommends  that the CWA  be amended to  establish a fee
structure for Section 404 permit  fees for major regulatory  actions, and that the
monies generated  from the fees be  placed in a special regulatory account and used by
 Corps districts (and assumed States, as appropriate) solely to increase the efficiency
and effectiveness of the regulatory program by reducing delays associated with permit
evaluations and wetlands delineations.  This fund would operate independently from
the Corps' normal regulatory operating budget.
                                  - 16 -

Should user fees be specifically authorized  in the CWA to recover the cost for
preparing and distributing laboratory performance evaluation standards and materials
laboratories and NPDES permittees?


The quality and reliability of delta used to implement water programs at the Federal,
Regional, and  State level is critical to the success of EPA Programs.  The Water
Laboratory Performance Evaluation Program, consisting of three separate performance
evaluation (PE) studies, is one of several tools to ensure the quality of monitoring data
required under the CWA.  These laboratory PE studies are valuable indicators of
whether laboratories have the equipment and technical ability to accurately analyze
monitoring samples required under the CWA. Laboratories and NPDES permittees are
encouraged or required by regulation to participate in  PE studies.

EPA currently provides performance evaluation materials to 5,000 Federal, State and
private laboratories and 7,500 permittees at no cost to the  users. Over half the
States require  commercial laboratories to participate in EPA Performance Evaluation
program to receive certification to analyze wastewater samples under the National
Pollution Discharge Elimination Program. Many States not using EPA performance
evaluation studies for certification, do use results of the studies to identify laboratories
with performance problems and to set priorities for laboratory audits. The results of
PE studies are also used  as  by States to  make certification decisions for other
environmental  programs.

The cost for preparing and distributing water PE materials to users regulated under the
CWA  was approximately $1.5 million dollars and 6 work-years in 1992. Costs are
expected to be  $1.6 million in 1993.  This level  of funding provides a minimal
program that does not meet all current  or future programmatic needs, because the
EPA budget for the program is not keeping pace with the increase in  size, scope, and
cost of the studies necessitated by new programmatic demands.

As the emphasis in monitoring shifts to measure biological and ecosystem health and
new programs for cleanup  and control of contaminated sludge are implemented, PE
materials and studies that test  laboratories' abilities to measure a wider range of
analytes in more complex  matrices—such as fish and  animal tissue, sediment, and
sludge-will be necessary.  Thus the costs for administering studies will  continue to
grow  at a time of continuing funding shortages in Office of Water and Office of
Research and Development.   If funding does not increase EPA will not be able to
sustain the current program or make changes to address new needs.
                                   -  17 -


>     EPA should be authorized to collect and retain user charges to generate a sum
      of funds equal to the cost for EPA to administer and implement a program for
      distributing laboratory  performance evaluation standards and materials to
      laboratories and permittees implementing requirements under the CWA.

>     The laboratory performance evaluation fee structure should reflect EPA's costs
      for given  categories of users  or  activities and  should  approximate EPA
      expenditures for each.

»•     A fund should  be maintained  to specifically  replenish inventories  and
      performance evaluation materials to users.  The fund should not exceed the
      annual costs for administering and implementing the program by more than five
                                   -  18 -

                  CHAPTER 2-TOXICS ISSUES


What changes are needed in the CWA to improve the ability to prohibit the discharge
of the most detrimental toxic pollutants?


Significant progress has been  made in decreasing the discharge of harmful toxic
pollutants to surface waters.  This has largely resulted from technology and water
quality based controls on point sources. Nonetheless, the discharge of certain toxic
pollutants continues to contribute to serious environmental and human health water
quality  problems.   Such  problems are evident in the  inventories of  impaired
waterbodies, the toxic contamination of sediments, and contamination-based fishing
bans and advisories.

Some pollutants are extremely harmful in small quantities and/or build up in the food
chain to produce adverse and long-term effects to human health and the environment.
Emerging evidence links certain pollutants not only to cancer, but also to neurological,
reproductive, developmental and immunological adverse effects. Such pollutants can
damage aquatic  ecosystems by directly eliminating sensitive species or indirectly
causing increased incidence of disease in the remaining species. Some pollutants may
also persist in the environment for decades, posing a continuing threat to humans,
aquatic  organisms, birds and other wildlife.

The CWA's technology-based effluent guidelines-to-NPDES permits process and the
complementary water quality criteria/standards-to-NPDES permits approach are still
the best mechanisms for EPA and the States to control the discharge of most toxic
pollutants into surface waters.   However, both approaches can be very time-
consuming and costly.  Developing an  effluent  guideline may take 5 to 6 years or
more, with costs ranging from $5 to $8 million.  Water  quality criteria may take 3 to
5 years to develop, with costs ranging from  $300,000 to $800,000 per pollutant for
chemical-specific  criteria.   It took 13 years before  all States adopted or EPA
promulgated w|ater quality standards for priority toxic pollutants with §304{a) criteria.
Translation of jthese requirements into permit limits takes more data and additional

§307(a)(2) authorizes EPA to issue an  "effluent standard" (which may  include a
prohibition) establishing requirements for toxic pollutants.  However,  the statute
mandates a burdensome rulemaking process that is more formal than the widely used
Administrative i Procedure Act informal  rulemaking requirements found in 5 U.S.C.

                                  -   19  -

553.  The procedures pertaining to  §307(a)(2) include: cross examining witnesses
during a public hearing presided over by an Administrative Law Judge; maintaining a
verbatim record of the hearing to be made available to the public; and, requiring EPA
to base the decision on "substantial  evidence" in the record (rather than considering
public comments  and  meeting an "arbitrary  and  capricious"  standard).   This
cumbersome process has rarely been used. The most recent use of the §307(a)(2)
process was 17 years ago (January 12,  1977, 42 £R 2613;  Feb.  2, 1977,  42 EE
6555; 40 CFR Part 129) when EPA published effluent standards for aldrin/dieldrin,
DDT, DDD and DDE, endrin, toxaphene, benzidine and polychlorinated biphenyls.


>     The Administration  recommends that the CWA be amended to improve the
      ability, where  needed, to restrict or prohibit the discharge of the most highly
      toxic  and highly bioaccumulative pollutants.  In making such determinations,
      EPA should use general informal rulemaking procedures to  ensure all credible
      issues are addressed,  but also to  ensure timely implementation.  Although
      discharge prohibitions  are only needed for  a few of the very "worst  actor"
      pollutants, such restrictions or prohibitions would be important steps towards
      the CWA's "zero  discharge" goal.

Administrative Procedures

>     The administrative  procedures in §307(a) should  be amended to authorize
      EPA's use of the rulemaking procedures in 5 U.S.C. 553 when establishing an
      effluent standard to restrict or prohibit the discharge of a toxic pollutant. After
      a 90-day public comment period, consultation with affected federal agencies,
      and consideration of relevant  matter presented,  EPA should make  a final
      determination as expeditiously as practicable. The basis  of judicial  review
      should be the "arbitrary and capricious" standard  in 5 U.S.C. 706(2)(A).

Discharge Prohibitions

>•     Section 307(a)(2) should  be  amended to revise and clarify  the  basis for an
      effluent standard that  restricts or prohibits the discharge of the most highly
      toxic  and highly  bioaccumulative pollutants that pose a substantial  risk to
      human health or to the chemical, physical, or biological integrity of the Nation's
      waters. The discharge requirements should be based upon the best available
      scientific  information  on:   (1) the  pollutant's  persistence, toxicity, and
      bioaccumulation potential; (2) the  magnitude and  extent of exposure to  the
      pollutant; (3) the relative contribution  of point source  discharges  of  the
      pollutant to the overall risk; (4) the availability of and risk posed by substitute
      chemicals or processes or the  availability of treatment processes or control
      technology; (5) the beneficial and adverse social and economic effects of any
                                    -  20  -

effluent standard, including the impact on energy resources; (6) the extent to
which effective control is being or may be achieved in an expeditious manner
under other regulatory authorities; (7) the impact on national security interests;
and (8) other factors EPA deems appropriate.

EPA will consult with the federal resource agencies and other applicable federal
agencies in rulemaking for pollutant discharge prohibitions.

EPA should have the authority to determine the scope of an effluent standard,
including the ability to apply it to certain classes or categories of dischargers.

EPA's authority under this provision should be applicable to all toxic pollutants
as defined in §502(13) of the CWA, rather than the narrower list of  priority

EPA should use the discretionary authority in existing statutes to regulate or
prohibit multi-media environmental releases that cause or contribute to a water
quality impairment.  The Administration  wants to  work  with  Congress to
develop approaches that would allow effective pollution control where other
Federal environmental statutes are not effective, and where an integrated multi-
media approach is the most efficient means to  reduce unacceptable risk. This
would not apply to mobile sources or pesticide programs.  EPA would use the
most appropriate existing! environmental statute (e.g., the Clean Air Act for air
releases) for controlling the release and would take into account the factors of
revised section 307(a)(2) above.

Any person  should be able to petition the  Administrator to  exercise the
discretionary authority  to regulate or prohibit multi-media  environmental
releases  of pollutants or classes of pollutants which  contribute to a water
quality impairment.

o     When submitting a petition, the submitter should include any information
      on the factors outlined for 307(a)(2).

o     Within twelve months following receipt of the petition, the Administrator
      should (1)  deny the petition based on the information  submitted as
      supplemented with other information available to the Administrator, or
      (2) after public comment, publish a plan to initiate rulemaking to restrict
      multi-media releases, including prohibition of releases.  In making this
      decision, the Administrator shall  consider  the factors  outlined for

o     If the Administrator finds there is insufficient information to grant or
      deny a petition, the Administrator should require additional information
                              -  21  -

            within 6 months of the petition being received. Following an appropriate
            period for submission of additional information, the Administrator should
            grant or deny the petition within 6 months.

      o     The Administrator should be required to respond to the petition within
            the schedule outlined above, except if the Administrator  has received
            petitions for multiple pollutants, the Administrator may  select which
            petitions to address first, and should then develop a plan for addressing
            the remaining petitions.

      o     The Administrator  should have  the discretion to  form classes of
            compounds  to expedite review and decisions on any  petition.

>•     The  pollutants  or group  of  pollutants  for  which EPA should establish a
      restriction or prohibition should not be specified in the statute.  Further, the
      statute should not specify deadlines for making any such determinations. Such
      determinations will vary from pollutant to pollutant.   Ensuring that they are
      based upon sound science argues in favor of relying upon EPA's scientific


>•     As part of any effluent standard, EPA should establish the effective date for the
      discharge prohibition.

Study of Chlorine and Chlorinated Compounds

»•     To develop  a strategy to comprehensively protect  human health and  the
      environment and to move towards the national goal of the Clean Water Act of
      eliminating the discharge of toxic pollutants, the Administration will develop a
      national strategy for substituting, reducing, or prohibiting the  use of chlorine
      and chlorinated compounds:

      o     Within 6 months following enactment, the Administrator should convene
            a task force which includes  representation by appropriate  federal
            agencies including, at a minimum, NIEHS, ATSDR, FWS and NMFS, and
            other  experts outside of the federal government to  comprehensively
            assess the  use, environmental and health  impacts  of chlorine and
            chlorinated compounds, and availability and relative efficacy and safety
            of substitutes for these substances as used in publicly owned treatment
            works and drinking water systems, and  solvents, PVC and other
            plastics, and in  pulp and paper manufacturing.   This task  force should
            identify  which  chlorinated compounds or  classes of   chlorinated
                                   - 22  -

      compounds  should  be examined  and develop a study building upon
      existing Agency studies and actions where appropriate.

o     Within 18 months following enactment, the task force should collect all
      current information on the use, and environmental and health impacts of
      chlorine and chlorinated compounds associated with the uses listed
      above, and the availability and relative efficacy and safety of potential
      substitutes.  In considering environmental and health impacts of chlorine,
      chlorinated compounds, and their potential substitutes, the task force
      should include the potential developmental impacts on aquatic species,
      wildlife, and humans, including but not limited to impairments to the
      reproductive, endocrine, immune, and nervous system functions.

o     Within 30 months following enactment, the Administrator should:
            (1) Review the information collected by the task force;
            (2) Develop a plan  for any appropriate actions,  including  the
            exercise of existing statutory authorities, to restrict or prohibit the
            use of chlorine or chlorinated compounds, in consideration of the
            environmental and health impacts, and availability and relative
            safety and efficacy of potential substitutes;
            3) Subject the plan to public comment; and
            4) Release a final national strategy for substituting, reducing, or
            prohibiting the use of chlorine or chlorinated compounds.

      In formulating this action plan, the Administrator should  consider the
      discretionary authority to reduce or prohibit multi-media environmental
      releases which  contribute to a water quality impairments.

Within three years of enactment, the National Academy of Science should
complete a study for the Congress on the current knowledge of chemicals that
exhibit endocrine, immune, and nervous system health effects in humans and
wildlife, including evidence that they increase the incidence of breast cancer,
decreased sperm count, or impaired reproduction.  The study should include
recommendations  for any  appropriate actions   which  are   based  upon
scientifically  defensible  findings for reducing or prohibiting the production
and/or use of such chemicals.
                             - 23 -

How can the CWA be amended to promote priority-setting based upon maximizing risk
reduction in the development of §304(a) water quality criteria?


The central challenge of the water quality criteria program is that the development of
criteria, methodology and guidance far exceeds any reasonable resource expectations.
The CWA provides EPA adequate authority to develop all  types of water quality
criteria (chemical, physical and biological), methodologies and guidance.  However,
there is no  statutory requirement to set priorities among these competing demands
based on maximum risk reduction potential and programmatic effectiveness.

In the 1970's and early 1980's, EPA focused water quality  criteria development to
address a relatively narrow subset of all water quality problems. Efforts emphasized
chemical-specific numeric criteria to protect aquatic life or human health because: (1)
chemical contaminants were associated with priority problems; (2) the current statute
targeted point source dischargers; and  (3) our. scientific knowledge  was the most
advanced in this area.

Since the  mid-1980's,  research and criteria development  efforts have expanded
beyond focusing on chemicals to address the full range  of ecological problems. For
example, these efforts include work on biological, wildlife, sediment, nutrient, and
habitat criteria. This shift in focus of research and criteria development is consistent
with the 1990 report of EPA's Science Advisory Board: Reducing  Risk:  Setting
Priorities And Strategies for Environmental Protection. This report recommended that
EPA attach as much importance to reducing ecological risk as it does to reducing
human health risks.  Further, the 1992 National Water Quality Inventory data on the
leading causes of waterbody impairments supported a focus  on ecological problems.

In focusing on ecological problems, environmental equity  considerations cannot be
ignored.   For example, contaminated  fish  may pose higher  risks to sensitive
subpopulations, including pregnant women, native and ethnic subsistence fishers, and
those with  compromised  immune  systems.  Although  States  have issued fish
advisories  in approximately 1300 waterbodies  to  limit public  consumption of
contaminated fish  or shellfish, there is inconsistency  in  the development of fish
advisories, the information contained in them, or the way susceptible populations are
informed of the risks.

Thus, while some  chemical pollutants  still contribute to serious  water quality
problems,  due to scientific advancements,  the  changing nature  of water quality
                                  -  24 -

problems and their relative seriousness, and the considerable progress in the control
of point source discharges, the need for other forms of criteria, methodologies and
guidance has increased.  To meet new challenges, we need a comprehensive set of
criteria, methodologies and guidance to accurately assess the water quality aspects
of ecosystem health and support efforts to maintain and restore waterbody integrity.


*     The  Administration  proposes  that  EPA  should  develop  criteria  and
      implementation guidance based  on the most current science, and should  have
      explicit authority to set priorities for developing such criteria based on risk and
      effectiveness. EPA needs the flexibility to be responsive to changes in science
      and understanding of our environmental problems. Statutory requirements to
      develop specific water quality criteria or types  of criteria on tight  deadlines
      would  hamper EPA's ability to  set priorities based upon a  comparative risk
      reduction determination  and  understanding   of  relationships  within  an
      ecosystem.  Such statutory requirements would fragment resources, time and
      attention among relatively minor risk areas.

Comprehensive Criteria Development Plan

>•     §304 should be amended to require  EPA to develop, within  two years of
      enactment, a comprehensive plan setting priorities for criteria  development.
      EPA should involve States, Tribes, other Federal agencies, academia and the
      public  in the development of the plan.  Priorities for the development of all
      forms of water quality criteria, methodologies or guidance should reflect relative
      risk  reduction  potential  and  risk  management considerations,  including
      programmatic needs, effectiveness and societal effects.   The plan should
      include provision  for simultaneous development of regulations,  policies,
      guidance, technical assistance, and training materials necessary to support
      timely  implementation of the criteria. The plan should be implemented to the
      fullest extent possible based upon appropriated resources, and updated every
      five years.

*•     The statute  should not specify the pollutants or types  of criteria documents,
      nor should it set deadlines for their development. These determinations should
      be part of the comprehensive criteria development plan.

Improved Data Availability

»•     §308(a) should be amended to  clarify that EPA  is authorized to request from
      dischargers the data necessary to support the development of water quality
      criteria for pollutants found in the discharges.
                                   -  25 -

>     EPA should  be given discretionary authority  to  require the  submittal of
      sufficient information to establish the need for a criterion and, if needed, data
      to  establish   water  quality  criteria  from  manufacturers,   registrants,
      formulators/packagers or re-packagers, as appropriate, of a pesticide registered
      or undergoing  re-registration under the Federal Insecticide,  Fungicide,  and
      Rodenticide Act and from manufacturers or processors, as appropriate, of a
      chemical on the Toxics Substances Control Act inventory list or subject to a
      Premanufacturing Notice under the Toxics Substances Control Act.

Fish Advisories

>     The statute should acknowledge and recognize the roles of EPA and FDA, after
      consulting with appropriate federal agencies, to develop factors and guidelines
      that States may use in issuing fish consumption advisories, including those that
      protect people  in cultural  groups who consume more fish than the average

Criteria Development  Process

*•     The statute should require EPA  to establish a  process for the development of
      criteria, methodologies or guidance in which States, Tribes, other  Federal
      agencies, academia,  local governments, industry, environmental groups,  and
      the public participate.
                                   - 26  -

Are CWA changes needed to improve the timeliness and scope of State adoption of
EPA §304(a) water quality criteria and other State water quality standards uses and


CWA §303(c)(1) requires States to update water quality standards at least once every
three years to ensure that: (1) waterbody uses reflect current conditions; (2) criteria
are based on the best available science, and address emerging issues; and (3) policies,
methods and practices are revised or modified to fully attain the goals of the Act.
EPA reviews and approves or  disapproves State  water quality standards and any
changes.  EPA promulgates standards for  a State if:  (Da State fails to  make
appropriate revisions in disapproved standards, or (2) a new or revised standard is
needed to meet the requirements of the Act.

In practice, State  reviews and updates of water quality standards have taken  many
years beyond the  once-every-three-years statutory requirement. Such delays create
serious impediments in  developing control  programs to restore  and maintain our
Nation's  waters.  For example, it took  13 years to get toxic pollutant criteria into all
State standards.   Despite this lengthy process, most States adopted  standards
identical  to EPA's water quality criteria for most pollutants.

Further,  EPA ultimately had to establish Federal standards for  14 States.   EPA
promulgation actions are resource-intensive and time-consuming.  For example, the
recently completed National Toxics Rule promulgation action took almost three years.

Aside from delaying the control of toxic discharges, this process has also diverted EPA
and  State  attention and  resources from other  pressing program  priorities  (i.e.,
biological, habitat, and contaminated sediment criteria and standards). In States, the
process has also stymied the adoption of narrative biological criteria and of wetland
water quality standards.

The Act  also provides as a goal under §101(a)(2) that wherever attainable,  water
quality should provide for the protection and propagation of fish, shellfish, and wildlife
and provide for recreation in and on the water. Nonetheless, 21 years after the Act,
some waters still lack use designations.  This gap inhibits effective implementation of
water pollution control programs.

With  the exception of consultation with appropriate Federal agencies  under the
Endangered Species Act, Federal natural resource management agency involvement
                                   - 27  -

in States' water quality standards reviews is often limited to the public hearing at the
end of the process. Yet Federal technical expertise and environmental and ecological
data  could  assist States during their  reviews of water  quality standards.   A
consolidated guidance document describing Federal natural resource management
agencies' technical expertise, data and requirements, would enhance a State's ability
to 'take advantage of the resources  and information when they would be most

As water quality programs move toward a watershed focus, the review and revision
of waterbody use designations and implementation policies should be coordinated with
those efforts. A pentennial review of water quality standards may be more consistent
with the watershed  planning focus and with the increasing  complexity  and site-
specific or ecosystem nature  of newer  forms  of water  quality criteria  (nutrient,
salinity /flow, habitat, biological and toxicity criteria). Not only are the new forms of
criteria more difficult and time-consuming  to adopt, but their application may  be
different from chemical-specific criteria.  To deal with this complexity, the §304(a)
criteria documents could explicitly describe the scope and applicability of the criteria,
e.g., using biological criteria initially as an assessment and evaluation tool to describe
the condition of the water resource rather than the basis for a permit limit. Integrating
the time frames of complementary water programs [§303(c), §303(d), §305(b), §314,
§319, §320 and  §402] would facilitate development, implementation and evaluation
of water pollution control programs.


>     The CWA should be amended to  improve compliance with the current statutory
      requirements for the review, update and adoption of enforceable water quality
      standards.  The new statutory provisions should maintain the opportunity for
      State exercise of primacy and substantial flexibility,  but should also ensure
      standards are in place in a timely fashion to avoid Federal promulgation actions
      or other administratively burdensome requirements. The statutory amendments
      should also promote the updating of waterbody uses  in coordination with
      watershed focused efforts.

Waterbody Use Designations

>     The CWA should require that all waters be evaluated for use designations. To
      achieve this objective, the CWA should be amended to provide that: not later
      than two years  after  enactment, all waters for which  uses have  not been
      designated, shall be designated  to provide for the protection and propagation
      of fish, shellfish and wildlife and for recreation  in and on the water, unless and
      until a State or authorized Tribe demonstrates that such uses are not attainable,
      and adopts an alternative use or uses that EPA approves in  accordance with
                                   - 28  -

Adoption of Pollutant-Specific Numeric Criteria

*     Section 303 should be amended to require that if a State or authorized Tribe
      fails to adopt water quality standards that have been through formal rulemaking
      review three years after EPA publication of new  or revised pollutant-specific
      numeric water  quality criteria under  §304(a) (including  toxic criteria,
      bacteriological criteria and other criteria to protect aquatic life, human health,
      and wildlife), then the §304(a) criteria automatically become the State or Tribe
      water quality criteria regardless of use designation, unless and until the State
      or authorized Tribe adopts and EPA approves a  revised water quality standard
      in accordance with §303(c){3).

»•     The statute should require States, within three years of enactment, to adopt a
      scientifically defensible provision or methodology that allows the States, where
      sufficient data exist, to interpret a narrative water quality criterion to  yield a
      numeric value.  The provision  or  methodology  would be used to derive a
      numeric value for those pollutants that cause water quality impairments and for
      which EPA has  not published §304(a)  criteria  or for which criteria  have not
      been made effective  in the State.  Such numeric values shall be used for  all
      purposes under  the Act for which the numeric criteria apply.

Adoption of Ecosystem-Specific Criteria  (e.g.. biological, habitat, nutrient)

»•     For those pollutants, factors or conditions requiring  the collection and use of
      site-specific or ecosystem-specific  data (e.g., biological, nutrient, habitat and
      other forms of ecological criteria), as specified in the §304(a) criteria document,
      the  Act should  require States  to  adopt  and to  apply those  criteria for the
      purposes stipulated in the criteria document as expeditiously as practicable, but
      not later than four years after their publication in impaired or threatened waters.
      For States failing  to act, EPA should either promulgate the applicable  criteria
      under §303(c)(3)  or take other  appropriate  action to facilitate State adoption
      of the criteria.

Comprehensive Water Quality Standards Reviews

 *    Rather than a triennial  water quality  standards review, the statute  should
      provide for a pentennial review to  reflect the  changing focus,  nature and
      complexity of the program. During the first pentennial review,  States should
      conduct a comprehensive review of, and make  appropriate revisions in, use
      designations, criteria and policies and submit the review and revisions to EPA.
      In some cases, States may have  designated uses which are not attainable.
      After completing the use attainability analyses,  States should make appropriate
      revisions to the  use designations, consistent with fully protecting existing uses
      and maintaining the designation for those which are attainable.
                                     -  29  -

Section 303{e) should be amended to require that EPA transmit to States a
coordinated guidance document compiled  from the submissions of Federal
resource management agencies. The coordinated guidance document should
describe, on a State-by-State basis, Federal  data and  information on water
quality related environmental considerations associated with maintaining and
protecting  the Federal interests  in fishery  resources,  wildlife  resources,
threatened or endangered species and their critical habitat, federal lands, and
other natural resources of federal  interest affected  by  the quality of waters
within the State.  During the development, review, and  modification of water
quality standards, policies, and procedures, States should fully consider this
data  and information.   EPA,  in  consultation  with  the Federal  resource
management  agencies,  should ensure  that  each State  has  given  full
consideration to this information and data before approving  the State water
quality standards.
                             -  30  -

How  should the  CWA be  amended to  enhance  the timeliness  and  level of
antidegradation protection given to important waters?


The antidegradation policy is critical to attaining the goals of the Act.  Although the
policy has been an essential element  in the water  quality standards program since
1968, the CWA does not specifically  define a water quality standard to include an
antidegradation policy, but references such policies in §303(d)(4)(B).

The Water Quality Standards Regulation (40 CFR §131.12) requires that States adopt
a State-wide antidegradation policy and antidegradation methods to:
maintain and protect water quality necessary to protect the level of existing

protect high-quality water (i.e., water quality that exceeds levels necessary to
support propagation of fish, shellfish, and wildlife and recreation in and on the
water), unless  the State makes a finding  that  lowering water  quality is
necessary to accommodate important economic and social development in the
area in which the waters are located;

maintain and protect waters which constitute an outstanding National resource,
including waters of exceptional ecological or recreational significance.
Antidegradation  involves  a two-step  process.    The first step  is  a  screening
determination of whether an activity will lower the quality of the receiving water. The
simple introduction of additional pollutants does not necessarily constitute a lowering
of water quality. This screening determination  involves a pollutant and site-specific
scientific  consideration of factors such as the type and  amount of  additional
pollutants, and the duration and spatial extent of the change. Where an activity does
lower water quality, it triggers the antidegradation review process.

Through the NPDES permit process, existing uses and high quality waters  are
protected. However, States have classified very few waters as Outstanding National
Resources Waters (ONRWs). This is due in part to significant limitations on activities
affecting the waters, as specified in EPA guidance once they are designated  as
ONRWs. Such limitations preclude new or increased loadings, except those that are
minor and short term.   An  ONRW designation could  also  significantly  affect
                                   - 31  -

dischargers to upstream waters or prevent the expansion of visitor facilities in national
or State parks if waters within the parks were designated as an ONRW.

EPA does not have the authority to designate waters as ONRWs. Nevertheless, there
is need to protect certain waters that are vital  to the character and function of
significant ecosystems.  To do so, some States have added additional  categories
providing  more protection.   This enables States to  give  important waters more
protection without the severe restrictions accompanying an ONRW designation.  The
additional protection  preserve the special  qualities or characteristics of the water
consistent with its use.


The Administration recommends  that the definition of a water quality standard be
expanded to be consistent with the current application of "State-wide antidegradation
policy and antidegradation implementation methods." In addition, the CWA should
establish a process that would:

»•     allow additional tiers of protection to enhance the ability of States to more
      precisely tailor their antidegradation policy to protect different types of special
      qualities against unacceptable degradation in important waterbodies that are
      not ONRWs;

>     preserve State flexibility and relies on State expertise in identifying and giving
      added protection  to important waterbodies;

>•     ensure timely assessment of all waterbodies for added levels of protection,  i.e.,
      high quality waters, special protection waters (SPW) and ONRWs;

>•     provide for the assessment of important waters for which there is a clear
      federal interest (e.g., national parks. National Marine Sanctuaries and National
      Estuarine Research Reserves, national wildlife refuges, national wild and scenic
      rivers, national wilderness  areas, etc.) and their consideration for additional

*     presumptively apply a SPW  level of protection for important waters where there
      is a clear Federal interest should States fail to make a deliberate determination
      of whether to provide them with  additional protection;

>     authorize the Secretaries of Commerce, Interior, and Agriculture to nominate
      to EPA certain  waters for designation as SPW or ONRW, and requires, within
      2 years of a nomination, EPA , after notice and opportunity for comments and
      consultation  with affected  States or Tribes, to make a determination on the
      designation of  nominated waters.  Consistent  with  State primacy on water
                                    -  32  -

quality standards, this authority should be narrowly exercised when States have
not acted timely to protect important federal interests in these waters.

authorize EPA to designate SPWs and ONRWs and to challenge State or Tribal
determinations  when they are  not  fully  protective of federal  interests in
important national waters. EPA should be further authorized to set forth the
conditions for their protection after notice and opportunity for comment and
consultation  with affected States or Tribes,  and  Federal natural resource
agencies.  Consistent  with State  primacy on water quality standards, this
authority should be narrowly  exercised when States have not acted timely to
protect important federal interests in these waters.
                              - 33  -



How should the CWA be amended to improve EPA's ability to promote pollution
prevention in effluent guidelines and standards?


Existing effluent guidelines provisions in  the CWA give EPA some flexibility in
fostering pollution prevention practices; however, some provisions are  unclear or
restrictive.  One could be strengthened to promote source reduction and minimize
cross-media transfer of pollutants.

CWA §304(e) authorizes EPA to specify Best Management  Practices  (BMPs) in
effluent guidelines to "control plant site runoff, spillage or leaks, sludge or waste
disposal, and drainage from raw material storage ..." for toxic or hazardous pollutants.
However, some industries (e.g., pulp and paper) can generate significant amounts of
waste due to spills, etc. that consist of conventional or nonconventional pollutants
(i.e., not toxic or hazardous) and thus these are not addressed by BMPs  in effluent


>    The CWA should be amended to allow EPA to specify BMPs for all pollutants
     and all  sources of pollutants, not just toxic pollutants. This provision would
     result in a more comprehensive coverage of pollutants, and thereby allow BMPs
     to be an effective tool to promote pollution prevention.
                                  -  34 -



The Administration proposes a fundamental restructuring of the NFS pollution control
program  under §319  of the  CWA.   NPS  pollution, including polluted runoff,
significantly contributes to the Nation's remaining water quality problems.  States
estimate that  nonpoint sources, together with storm water and CSOs, account for
over half of remaining impairments of lakes, rivers, and estuaries. Nonpoint sources
also affect ground water, riparian areas, and aquatic habitat,  such as wetlands.

The Administration proposes a fundamental strengthening of  the basic structure of
§319, in  part by building on a comprehensive watershed  protection  approach.
Existing NPS  management programs  should be upgraded  and strengthened  to
implement best available management measures for nonpoint sources causing or
contributing to water quality impairments or threatening such impairments, within
seven and one-half years of enactment of legislation reauthorizing the CWA.  This
initial implementation period should be followed by a second, five-year period of time
to implement further measures where necessary (considering the actual and expected
environmental benefits of the original management measures) to achieve water quality

In implementing these strengthened  §319 programs, States should rely on a mix of
voluntary and  regulatory approaches.   However, State programs  should include
enforcement authorities,  effective at the time of program approval, to  be  used as
needed to ensure implementation  of  the  management measures.  These  State
authorities should be backed  by Federal enforcement authorities  that could be
exercised if a State should fail. Where States do not develop an approvable program,
§319 grants should be withheld from the State, and, EPA should be authorized to
establish enforceable minimum NPS controls.

The voluntary element of this approach will require leadership and  support at the
Federal, State, and local levels of government to address successfully the water
quality issues  identified by the States under this proposal. The appropriate agencies
will need to be actively involved, providing assistance and guidance to those seeking
to adopt changes designed to protect and restore water quality.  The Administration
recognizes that Congress will need to be a  partner in the  effort to provide the
necessary resources to work  with the  States as they  address these water quality

The Administration proposes that funding be increased for State  implementation of
NPS  programs.  As an additional source of funding, the Administration proposes
                                 -  35 -

clarifying State revolving loan fund eligibility for IMPS projects whose principal purpose
is protecting and improving water quality.

Recognizing the crucial role of Federal lands management and Federal activities in NFS
control, the Administration proposes clarifying the Act to require that Federal agencies
comply with specific State or local requirements in nonpoint source programs to the
same extent as non-Federal parties  in those  watersheds.
                                    -  36 -

How should the CWA be amended to strengthen State efforts to protect watersheds
from NFS pollution?


NFS pollution  including polluted runoff remains the dominant water quality and
environmental  concern in most areas.  For the last decade, States and others have
consistently reported  that  NFS  pollution is the main  reason that  water quality
objectives are  not met.

States report that, of  the waterbodies assessed, two-thirds of our Nation's rivers,
streams and estuaries  and over half of our Nation's lakes currently meet State water
quality standards and designated  uses. While these results point to the considerable
progress in controlling point sources,  our  remaining water  quality problems are
extensive.  Of the assessed  waters, States reported in 1992 that over 258 thousand
miles of rivers and streams, nearly 8 million acres of lakes, and over 9 thousand miles
of estuaries do not meet water quality standards or their designated uses. States also
report that excess sediment and nutrients are leading causes of wetlands degradation.

States list  agriculture as the most  widespread  category of concern;  it  adversely
affects about two-thirds of all impaired river miles and about one-half of all impaired
lake acres.  States also identify urban runoff and storm water, resource extraction,
hydrologic  modifications, and contaminated sediments  among the  sources  most
widely contributing to water quality impairments Nationwide. Furthermore, depending
on  local  conditions and economic activity, other nonpoint sources-such as land
disposal  (including on-site  wastewater systems),  forest harvesting,  and  small
construction sites-can also be significant contributors to water quality problems.

The leading causes of impairment related to nonpoint sources are siltation,  nutrients,
and organic enrichment. Moreover, not only the  chemical, but also the physical and
biological components of aquatic  ecosystems,  are  important to maintaining the
integrity of our Nation's waters.  For example, development can  severely alter the
natural vegetation and infiltration characteristics of watersheds, causing higher and
more frequent runoff with subsequent downstream erosion, riparian alterations and
destruction of habitats, including wetlands. Rivers  and streams  are also affected
significantly by temperature stress, caused primarily by  the loss  of streamside
vegetation  that provides shade, and by channelization and hydromodifications  (e.g.,
dams and flow alteration).  Wetlands can be adversely impacted by stresses such as
pesticides in runoff, hydromodification, urban development practices, and  excessive
sediment and nutrient loadings.
                                   - 37  -

Current Actions

In 1987, in §319 of the CWA, Congress established a national approach of relying on
State programs for managing NPS pollution. Under §319, States were required to
develop EPA-approved NPS assessments and NFS management programs to address
the identified problems. Approved State programs were eligible to receive EPA grants,
and State revolving loan funds, to implement their NPS programs.  From FY 1990
through FY 1993, States received a total of $193 million in §319 grants to implement
their approved programs.

State efforts to date have led to increased public awareness of NPS pollution and
available methods to control it. State NPS activities and projects have demonstrated
the effectiveness  of a variety of innovative management practices, institutional
arrangements, and watershed projects. Efforts by many Federal agencies [e.g., the
U.S. Departments of Agriculture (USDA),  Interior  (DOI), and Transportation, the
National Oceanic and Atmospheric Administration (NOAA), and the U.S. Army Corps
of Engineers]  have  buttressed  State efforts  in  this  regard  and have  led  to
improvements in a significant number of watersheds.

States currently employ a mix of voluntary and enforceable approaches to implement
their NPS programs.  States are not currently required under §319 to have enforceable
policies to implement the programs. EPA does not have any independent authority to
establish NPS controls where a State has failed to develop an approvable program; nor
does EPA have any other authority to assure that States develop and implement NPS
control programs.

As one step to promote increased control of NPS pollution  in coastal areas,  Congress
enacted §6217 of the Coastal  Zone Act  Reauthorization Amendments of 1990
(CZARA).   EPA and NOAA jointly administer this program.  CZARA  directs EPA to
publish  detailed technological baselines  (based  on "best available, economically
achievable" NPS management measures) to guide new State  programs to protect
coastal  waters from nonpoint pollution.   CZARA  also  requires States to  have
enforceable State policies and mechanisms to implement their coastal NPS programs
(no Federal enforcement authority is established).  CZARA provides that EPA and
NOAA shall withhold specified  percentages  of  States' NPS and  coastal  zone
management grants from States that do not submit approvable coastal  nonpoint
pollution control programs under CZARA.

Action Needed

Despite State progress under §319 nationally and the promise  of CZARA in coastal
areas of the country, the problems of NFS-related impairments are so widespread that
State programs must advance even further. Existing State programs under §319,
while generally providing a good, basic framework, need to be upgraded. While EPA
                                  - 38  -

and States are working to improve §319 implementation, stronger authority is needed
if we are to make the progress required.


Under the Administration's  proposal, §319 should be amended  to  bolster NFS
programs by specifying the following:

>     Within  two years of enactment of CWA reauthorization, and every five years
      thereafter. States should specifically identify:  (1) those waterbodies and their
      watersheds that are impaired or threatened by nonpoint sources; and, (2) other
      special waters, such as ONRWs and drinking  water supplies.  This inventory
      should  encompass  major relevant  stresses on  waterbodies in addition  to
      chemical  pollutants.  These assessments should be  an integral part of the
      comprehensive State inventory of waters (described in the Monitoring Chapter).

>     In  impaired, threatened,  and special  protection areas listed in  the  State
      inventory of waters, States should expand their existing NPS management
      programs to implement best available management measures for categories of
      nonpoint  sources  causing  or significantly  contributing to water quality
      impairments or threatened impairments. These State programs should be based
      ion EPA-issued national minimum program and management measure guidance,
      which in turn should consider costs and pollution and risk reductions achieved
      and should be broad and flexible enough to allow for appropriate local tailoring.
      Site-specific plans and adaptations to local soil and climatic conditions should
      be encouraged, provided that:  the plans are developed and approved by the
      relevant Federal or  State agency, the plans are designed to manage nonpoint
      pollution, and  the  resulting level of control  is no less stringent than that
      established by  management measures.

>     An initial period of two and one-half years from the date of enactment should
      be provided to States  for developing  and  submitting  their revised  NPS
      management programs, followed by a five-year period for implementation of
      NPS controls. This should be followed by a five-year period for implementation
      of additional  NPS  controls where necessary (considering  the  actual and
      expected water quality improvements resulting from the original management
      measures) to assure that water quality standards are attained and maintained
      in all waters.

+     Additional protection State-wide is necessary as well to make sure that water
      quality standards (including designated  uses) are maintained. Best available
      management measures should be applied to all new nonpoint sources except
      for those States with an approved watershed management program.
                                   -  39 -

Where a State undertakes a strong, broad program to expeditiously address all
activities pursuant to the Administration's proposal for watershed management
(discussed in Chapter 4), States should be allowed to seek approval from EPA
for greater flexibility in developing nonpoint source management measures
(under procedures outlined in the NFS control subsection of the "Incentives for
Watershed Management issue paper).

States should be required to include authorities for enforceable State and local
implementation mechanisms in their NFS  management programs but should be
provided flexibility to rely initially as much as possible on successful voluntary
approaches.  States will need to have enforceable authorities in their programs
from the outset as one means of motivating voluntary activity and to address
situations where necessary implementation of measures is clearly not taking
place.  State enforcement authority should include the ability to seek injunctive
relief and to impose appropriate civil penalties.

State and local implementation mechanisms should be specific about the role
of Federal facilities  as  part of the regulated community  and enforcement
provisions should apply. (See the Recommendations  below under "Federal
Lands and Activities.")

To promote State adoption of these strengthened NFS programs, Congress
should provide incentives and disincentives, including:  increased  Federal
funding of State NFS programs; authority  for EPA to  withhold §319 grants
from States that do not adopt approvable, upgraded  NFS programs or do not
implement them; and increased priority for expenditures of other Federal funds
for  NFS control  for those States that adopt  approvable,  upgraded NFS

EPA should be authorized to establish enforceable  minimum NFS controls where
a State has failed to  develop an approvable program.

As a backup to State enforcement of State management programs, EPA should
also be authorized to take enforcement action when  EPA has provided notice
to responsible parties of their requirements to implement program requirements
and has also  informed the State of this,  and the  responsible parties have not
implemented  applicable requirements after receiving  EPA's  notice.   (As a
practical matter, this Federal authority would be exercised in those cases where
significant environmental harm has occurred or is threatened, and where the
State has not taken timely and appropriate enforcement action of its own. EPA
should issue guidance, after public input,  concerning appropriate penalties and
appropriate injunctive relief in federal enforcement actions, and this guidance
should be made available to the States. States should be encouraged to adopt
this guidance.)
                             - 40  -

Citizens should be allowed to petition EPA to take enforcement action where
the State has not taken timely and appropriate enforcement action of its own.
EPA would take enforcement action, as the Administrator deems appropriate,
after EPA has provided notice to responsible parties of their requirements to
implement program requirements and has informed the State of the intent to
take action,  and the  responsible parties have not implemented  applicable
requirements after receiving EPA's notice. (As a practical matter, this Federal
authority would be exercised in those cases where significant environmental
harm has occurred or is threatened, and where the State has not taken timely
and appropriate enforcement action of its own.)

The Administration intends to work with Congress and States to integrate CWA
§319 and Coastal Zone Act Reauthorization Amendments §6217 programs to
avoid duplication.
                             - 41  -

                        FUNDING AND FINANCING
 What incentives should be provided and what sanctions should be applied to promote
 improved State implementation of NFS programs?


 EPA estimates that the total capital cost to implement best available NFS management
 measures for all agricultural and forestry nonpoint sources across the country would
 be about $8.8 billion over the next 20 years.2 Operation and maintenance costs have
 not been estimated, nor have needs for such nonpoint sources as hydromodification
 or storm water runoff from small communities and light industry, which are expected
 to be  significant.

 The benefits of NFS pollution control appear to be significant. For example, in 1985,
 the Conservation Foundation estimated in-stream damages from cropland erosion
 alone to be $2.5 billion annually and total in- and off-stream damages to be $3.5
 billion  annually.3

 For the last few fiscal years, Congress has annually appropriated about $50 million
 for States and Tribes to implement NFS programs.  Other Federal agencies provide
 additional financial and technical support for activities that help reduce NFS pollution.
 However, to  fully address  the considerable national  NFS pollution control needs,
 additional resources will be needed at  the Federal, State, and local levels.

 The CWA currently contains a one-third of one percent cap on §319 grants to Indian
 Tribes  (resulting in a total of $165,000 in FY 1993).  This cap is hindering EPA's
 ability  to assist Tribes in developing and implementing their NFS programs.
   2The costs for a more targeted approach, described under "Strengthened State
Programs" above, would result in a lower cost than this national figure.

   3This estimate, in  1985 dollars,  does not include water quality damages from
animal waste, fertilizer, pesticides, grazing, irrigation or any non-agricultural nonpoint

                                   -  42  -


>•     The Administration proposes that  §319 grants to States be increased from a
      base of §50 million per year to $80 million per year in  fiscal year 1994 and
      $100 million per year for each of fiscal years 1995 through 1998.

*•     The one-third of one percent cap on Tribal grants should be removed.

*     The State revolving loan fund eligibility for NFS projects should be restricted to
      those activities whose principal purpose is protecting  and improving water
      quality to encourage States to use these funds to support their priority NFS

+     Pollutant trading techniques between all sources (point and nonpoint) affecting
      the same waterbody in a similar manner should be explicitly  recognized and
      promoted, and appropriate baselines and boundaries on their application should
      be defined, to promote sound, cost-effective approaches to meeting water
      quality standards.
                                   - 43  -

How should the CWA be amended to promote improved control of nonpoint sources
from Federal lands and activities?


Over 29 percent of the land in the United States, 701 million acres, is public land,
administered by the U.S. government for various purposes through the Bureau of Land
Management, the Forest Service, the Park Service, the Fish and Wildlife Service, the
Department of Defense, and  other  Federal agencies.  In  addition, many Federal
agencies, such as the Federal Energy Regulatory Commission, the Army Corps of
Engineers, the Bureau of Reclamation, the Bureau of Land Management, and  the
Forest Service issue licenses and permits and fund or conduct activities that can, if
conducted improperly, result in NFS pollution.

Many Federal agencies implement programs to control NPS pollution that may be
associated with their land  management or program administration  responsibilities.
Indeed, some studies have found Federal lands to be better managed, on balance,
than similar privately-held  lands.   However, improved control of NPS pollution is
needed for Federal as well  as for private lands and activities.

Current law requires Federal agencies providing financial assistance and implementing
development projects to be consistent with State NPS management programs or
explain why they are not consistent.  Under the current system, some conflicts or
differences of opinion have arisen among States and Federal agencies as to the extent
to which Federal programs are or should be consistent with State programs.


>     Require  Federal  agencies to implement management measures in the same
      watersheds and to the same extent as non-Federal entities, except for individual
      cases where the President determines it to be in the paramount interest of the
      United States to provide an exception.

*•     Strengthen §319  consistency provisions to require States  to  identify  the
      Federal lands and Federal activities that are inconsistent with the State NPS
      management programs approved by EPA under §319, and require the Federal
      agencies to  comply  with State or local requirements under  the programs,
      pursuant to the sovereign immunity waiver in  §313  (subject  to Presidential
      exemption). In addition, federal agencies are not relieved from the requirements
      under the CZMA.
                                  -  44  -

                      IRRIGATION RETURN FLOWS


Should the CWA be amended to enhance the management of irrigation return flows?


Current information indicates significant ecological impacts downstream as a result
of potentially toxic chemical constituents mobilized from soils by applied irrigation
drain water and transported in irrigation return flows ("IRFs").

IRFs containing high concentrations of salts and trace elements are disposed of by one
or a combination of methods including: discharge to holding ponds, local waterbodies,
evaporation ponds, or fallow fields; injection into deep wells; or reintroduction into the
local irrigation system. EPA reported on this water quality problem in its 1992 Report
to Congress on managing NFS pollution.

An estimated 25-35 percent of the irrigated lands in the West have salinity problems,
and the problems are increasing.  The high rate of evapotranspiration in  the western
States has led to increased levels of toxic constituents in evaporation ponds where
most  of the documented drainage-related impacts to wildlife have been observed.
This problem does not appear to be limited to the DOI's 26 reconnaissance study

Contaminated drainwater may permanently perturb an  ecosystem's  biological and
chemical balance.  Aquatic plants and animals can accumulate tissue concentration
of some drainage contaminants  100 to 10,000 times greater than ambient water
levels.  In  the  San  Joaquin Valley,  California,  field studies in 1987 and  1988
documented adverse biological effects in birds at 7 of 12 ponds studied, representing
approximately 60 percent of the total acreage of ponds in the valley.

IRFs enriched with boron and selenium and containing extraordinary concentrations
of salts are often commingled with water supplies for public and private wildlife areas.
The drainage water  continues to provide instream  flows for fisheries and  other
beneficial uses.  However, untreated drainage effluent has been identified in studies
by the Fish and Wildlife Service and others as a serious threat to the health of fish and
wildlife (impacts associated with IRFs have been shown to cause reduced survival,
reduced growth, and decreased reproductive success in numerous species) and
potentially  humans.   The U.S. Fish  and  Wildlife Service estimates that up to 10
percent of Federal wildlife refuges nationwide may be affected by this water quality
problem.    Health  advisories  have  been issued  recommending limited  or no
consumption of certain fish and wildlife with documented high concentrations of IRF
                                   -  45 -

constituents. Several areas in the West have issued fisheries consumption advisories,
and waterfowl consumption advisories have been implemented in Utah and California.

Agricultural drainwater is exempt from NPDES permitting requirements under §402
of the CWA.  The National Research Council has recommended that irrigation return
flows not be exempt from Federal or State water quality standards and enforcement.


>     EPA , with the concurrence of the Departments of Agriculture and the Interior,
      and after consultation  with States  and other Federal agencies, should submit
      a report to Congress within two years of enactment which:


evaluates the nature and extent of water quality problems presented by
irrigation return flows;
identifies  the  most  promising and cost-effective  technical  and
programmatic solutions to those problems; and,
recommends appropriate actions, including programmatic improvements
and necessary legislative changes.
      The report should reflect all relevant existing studies and monitoring information
      and take existing programs and initiatives into account.
                                  -  46  -

                   CHAPTER 4--WATERSHEDS


The Administration proposes a new provision  in the CWA to establish State-wide
programs for comprehensive  watershed management.  The proposed watershed
management approach would focus attention within hydrologically-defined watershed
areas and engage stakeholders from all levels of government as well as the private
sector.  Working together the stakeholders would identify priorities and  carry out
actions tailored to address the specific set of problems found within the watersheds.

The watershed approach makes good sense environmentally and programmatically.
Thinking more comprehensively,  watershed management teams that combine the
expertise and authorities of many disciplines can realize environmental improvements
that go  beyond traditional cornmand-and-control, chemical water quality programs.
For  example,  through  the  Anacostia  Watershed  Restoration  Agreement,
representatives from Federal, State, and local governments, the business community,
and volunteers in the Washington,  D.C. area have been working  side-by-side to
improve one of the Nation's most blighted waterways.  Fish migration barriers are
being removed, riparian areas revegetated, and wetlands restored and created, all in
addition to traditional control of discharges from point sources. There are many other
examples of excellent collaborative  and comprehensive projects  that address the
particular problems   found  within  watersheds  around  the  country.    The
Administration's provision would  promote and support these efforts and more.

Under the new provision. States, Territories, and eligible Tribes4 could choose to
implement comprehensive watershed programs, which would be approved by EPA
after conference with other Federal agencies.  The States  would determine the
boundaries for all watersheds in the  State and set a schedule for  addressing those
watersheds. Where the level of  work and the need for coordination dictates, the
States could establish watershed management entities with appropriate representation
of stakeholder  interests regardless of race, ethnicity, or income.  The States would
oversee the  work of such entities and approve the watershed management plans
developed by them.  The individual watershed management entities would serve as
focal points for comprehensive analysis, problem solving, and implementation efforts
to address water quality concerns, as well as aquatic living resource and human
health issues.

The Administration also proposes three other  changes to the Act  that (1) would
provide guidelines for States wishing to adopt market-based approaches to point and
   throughout this  Chapter, "States"  means all States,  Territories, and eligible
Tribes, where applicable.

                                  - 47  -

NFS pollution controls within watersheds; (2) promote the development of wetlands
management plans that would lead to increased flexibility and predictability of the
wetlands permit process on a watershed basis; and, (3) create comprehensive State
inventories of waters that are threatened, impaired, or in need of special protection
(see the discussion of this proposal in the Chapter on Monitoring).
                                   -  48 -

                    STATE WATERSHED PROGRAMS
Should the CWA be amended to provide for a comprehensive, integrated watershed
management approach? If so, what should be the elements of a State watershed


Over the past 20 years, substantial reductions have been achieved in the discharge
of pollutants into the Nation's lakes, rivers, wetlands, estuaries, and coastal waters.
These successes have been achieved primarily through the control of point sources
of pollution.  While point source discharges continue to present an environmental
threat in some areas, it is now  well understood that potential causes of impairment
of a waterbody are  as varied as human activity itself.   For  example, besides
discharges from  industrial or municipal sources, the health of an aquatic ecosystem
may be threatened by: urban, agricultural, or other forms of polluted runoff; land
disturbance activities and hydromodification; altered flows and ground water tables;
over harvesting  of fish and other  organisms; introduction  of exotic species; and
deposition of pollutants originally emitted into the atmosphere. Evidence of impacts
from such sources can be seen  in the decline of the salmon populations in the Pacific
Northwest, the declining oyster stock in the Chesapeake Bay, the declining health of
the Everglades and coral reef systems in Southern Florida, and in numerous other
small and large watersheds across the country.

Many of these activities are not addressed effectively by programs under the CWA
and a variety of other Federal laws that provide mechanisms to protect, restore, and
enhance our water resources.   The several Federal laws that address or partially
address these  problems have tended to focus on particular sources, pollutants, or
water  resource  uses  and generally  do not  take  an  integrated  environmental
management approach to all water resource issues within hydrologic boundaries. As
a result, significant gaps exist in our  efforts to protect  ecosystems  from the
cumulative impacts of a multitude of activities.

Existing water pollution prevention and control programs do, however, provide an
excellent foundation  on  which  to  build a comprehensive, geographically-based
approach-a watershed management approach. The watershed management approach
provides for: (1) recognizing that all resources within natural (hydrologically-defined)
watershed boundaries are part of interconnected systems and are dependent upon the
health of the ecosystem as a whole; (2) identifying priorities and tailoring solutions to
focus limited available resources to address the specific set of problems found within
those systems;  (3) building partnerships and  integrating  Federal,  State, Tribal,
regional, Territorial, local, and private programs within the watershed; and, (4) building
                                   -  49  -

local  commitment  to implement chosen  solutions, thereby  achieving  greater
efficiencies and effectiveness through management on a watershed basis.

State-based programs can be effective and  efficient mechanisms for promoting
comprehensive watershed management activities.  Many water programs and other
natural resource management, protection, restoration, and remediation programs are
implemented through the States.  A comprehensive State program would provide for
an inventory of all watersheds and, thereby, assure a more consistent, risk-based
approach  to selecting  watersheds for priority  treatment,  for example,  highly-
threatened watersheds, pristine watersheds, and important urban watersheds.  It
would also assure more extensive use and integration of the approach as a way of
managing water-dependent ecosystems. Finally, a State-based watershed program
would respect the key role played by States in the water pollution control program and
allows for a program authorizing State approval of individual watershed management
plans. Earlier area-wide planning efforts were of limited success because they did not
adequately recognize this key State role.

For these reasons, States  are the logical  units to  develop State-wide  watershed
programs  and to oversee development of watershed  management plans (hereafter
referred to as WMPs)  within their jurisdictions.


The CWA should provide for the development of State watershed programs subject
to EPA approval and oversight, with significant involvement from other appropriate
Federal agencies. The statute should be clear that, except as specifically provided for
under the proposed incentives, nothing in the watershed provision would alter any
State or local government responsibilities under the CWA or any other Federal law.

To be eligible for approval, the Act should require that State  watershed programs
include the following elements:

>     An identification of the State agency responsible for overseeing and approving
      watershed management plans, and for  designating watershed management
      entities and lead responsibilities for such entities, which might include any other
      State  agencies or sub-State agencies.

*•     A determination of watershed boundaries throughout the State. States should
      work with adjacent States to establish boundaries for those watersheds whose
      hydrologic boundaries cross State boundaries.  Watershed  scale should be
      determined by  the  State;  however, the  U.S. Geological  Survey (USGS)
      hydrologic cataloging system should be used as the basis for  delineating
      watersheds, and appropriate ground  water mapping features should be taken
      into account.
                                   - 50  -

 Selection of priority watersheds for developing and implementing watershed
 management plans. States should identify the watersheds for which they
 would develop and  implement plans.  In addition, States would submit to EPA
 the factors by which they selected such priority watersheds. These factors
 should  include:   (1) the presence within  the  watershed of threatened or
 impaired waters,  especially those affected by NFS pollution; (2) the need to
 protect highly  productive, fragile, declining,  or unique habitats,  such  as
 wetlands (based  on the comprehensive State inventory of waters);  (3) the
 degree of risk to the ecosystem and human health; and, (4) the need to restore
 and/ or maintain  waters of special importance to communities, for  example
 valuable urban waterways. Other  programmatic factors, such as the cost of
 achieving environmental objectives, workload, and the availability of technical
 or financial resources, could also be included.

 A schedule,  including appropriate milestones,  for progressively achieving
 environmental objectives in all watersheds within the State.  States should
 devise schedules  that provide for a relatively constant level of effort  with the
 ultimate goal that environmental objectives, including water quality standards,
 be met not later than 15 years after enactment.  The schedule should lay out
 a  logical sequence that  provides  for  early  development  of plans and
 implementation of actions to achieve environmental objectives highest priority
 watersheds first;  and provide that  plans will be approved and adopted for all
 priority watersheds  within 10 years of enactment. For example, a State might
 set a schedule that would provide for plans to be completed in one-third of its
 highest priority watersheds  in the first three  years; those plans would  be
 implemented while planning was begun in the second tier of watersheds, and
 so on. Detailed plans developed by watershed management entities should not
 be required in all  watersheds; however, the State should be responsible for
 attaining and maintaining environmental objectives as expeditiously as possible
 but no later than  15 years after enactment in all  watersheds.

 Designation of watershed management entities and the lead organization of
 each entity, as needed. Some watersheds may need minimal work to maintain
 or meet the goals  of the CWA.  For these watersheds it may not be necessary
to establish management teams;  rather, actions on the part of a State agency
to ensure restoration or protection  or a reassessment at a later date to verify
ecosystem health  may suffice.   Other  watersheds may  need intensive
 management over  time involving many  levels of government and other
organizations.  In those cases, States  should be encouraged to designate new
or existing entities,  such as entities administering National Estuary Programs
under CWA §320,  to facilitate  development of appropriate interstate and
international efforts. Any designated watershed management teams should
include an array of interested and affected parties.
                             - 51  -

An identification of State environmental objectives to be adopted and achieved,
as appropriate, by watershed management entities that, at a minimum, consist
of:  (a) water quality standards, including, as expeditiously as possible, criteria
for human health, biological, habitat, nutrient and other ecological endpoints,
adopted by the State for each watershed; and (b) other environmental goals
such as acres of various categories of wetlands and percentage of stream miles
with healthy riparian zones.  In identifying State objectives  for watershed
management,  the  States  should  be  encouraged  to build on existing
Comprehensive State Ground Water Protection Programs.

Necessary components for watershed management planning, implementation,
monitoring, and reporting requirements that must be met in order to qualify for

Working  cooperatively  with  other  States as  appropriate  for  interstate
watersheds, processes for State approval of watershed management plans,
including public review of plans and for ensuring compliance with other State
and Federal statutes.

A process for  State oversight and  evaluation of watershed management
planning and implementation efforts.

A process for public involvement in watershed  management to the maximum
extent practicable. States should provide public notice and an opportunity to
comment on the State watershed program prior to submittal of the program to
EPA for approval. States should also encourage formation and participation of
public advisory groups  during the watershed program development.

A demonstration of the capability to implement the State watershed program,
including  enforceable policies and mechanisms and requirements no less
stringent than those established for sources under other sections of the CWA
and other applicable Federal  laws and in effect as of the date of program
submission. This should include regulation of private and Federal facilities and
any water allocation or use laws or programs that the State must or elects to

For each watershed, a description of the process for involving:

o     those Federal agencies with a local interest in the watershed;
o     those Federal  agencies with natural resource trust  responsibilities or
      facilities  or activities  within the  watershed (States must  provide  an
      opportunity for such agencies to participate);
o     those States whose land area encompasses a portion of the watershed;
                             -  52 -

o     those Indian Tribes  whose  land area encompasses a portion of the

States should work with representatives from a broad range of stakeholders,
including all  levels of  government, during  all  steps of  State  program
development.  There should  be no deadline for submitting  State programs;
however, to be eligible for  the nonpoint source incentive as described in the
incentives section, certain showings must  be made  within 30  months of
enactment, and such showings must subsequently be approved by EPA.
                             -  53 -



 How can the  CWA empower State  and local efforts  to comprehensively manage
 watersheds?  What should be  required as  minimum  elements  of any  watershed
 management plan?


 The State watershed program provides a logical, risk-based framework for addressing
 all watersheds within each State. Successful management of specific watersheds,
 however, is critically dependent upon locally-based processes. In many cases, it is
 the local citizenry who will implement WMPs and who have the keenest sense of
 many of the problems and opportunities presented within the watershed.

 Experience with such geographically-based programs as the Clean Lakes Program,
 National Estuary Program, Chesapeake Bay, Great Lakes, and Gulf of Mexico Programs
 indicates that people are most likely to care about, and care for, the particular body
 of water near which they live and  on which they  depend for drinking  water,
 recreation, sustenance, or their livelihood. State-designated watershed management
 entities  will: build on this local commitment; coordinate private sector, regulatory,
 and  voluntary programs;  and comprehensively address cumulative  impacts by
 developing and implementing solutions appropriate to the particular watershed.


 Amendments to the CWA should direct those watershed management entities or State
 agencies that have been designated to carry out watershed-level management under
 an approved State watershed program to undertake the following activities:

 1.    Provide for the participation of all affected and interested parties including all
      levels of government, nongovernmental organizations, the private sector, and
      the public.

 2.    Establish a protocol  for making decisions and  resolving conflicts among
      members of the watershed management entity.

3.    Establish local  environmental  objectives  for  comprehensive  watershed
      management that would further the goals of the CWA and be consistent with
      all applicable State, Tribal, and Federal statutes and regulations, including water
      quality standards.
                                  -  54  -

4.    Identify environmental  Indicators  to be  used to  monitor  and  report on
      attainment of the environmental objectives.

5.    Characterize the watershed ecosystem, including an analysis of the causes and
      sources of point and nonpoint pollution as well as an inventory, as necessary
      and appropriate, of wetland and ground-water resources and other valuable
      aquatic habitat and a description of the major causes of loss and degradation
      of these resources in the watershed.

6.    Identify specific implementation actions, and, to the extent practicable, their
      costs, including voluntary, mandatory, and educational efforts, that will attain
      and maintain water quality standards and meet other environmental objectives.

7.    Develop a Watershed Management Plan (WMP) that lays out a  schedule and
      specifies who will oversee implementation as well as the persons responsible
      for implementing specific actions under the plan. The WMP should also identify
      existing and potential sources of funding for implementation.

8.    Implement the plan,  evaluate  progress  toward  meeting environmental
      objectives, and  provide reports to the State consistent with the requirements
      specified  by the  State.   Watershed management  entities  should develop
      cost-effective  physical,  chemical,   and  biological monitoring  programs,
      coordinating with and/or incorporating volunteer monitoring as appropriate. The
      statute should require that all watershed-level management entities receiving
      Federal funding carry out some level of monitoring and assessment of risks to
      public health and living  resources. The intensity and frequency  of monitoring
      will vary with watershed goals  and degree of risk and should not be specified
      in the Act; rather,  the statute should require that intensity and frequency of
      monitoring be covered by EPA  guidance.

9.    Identify the enforceable policies, mechanisms and requirements, including those
      established for sources under other sections of the CWA, and  other applicable
      Federal and State law that will be used to enforce the appropriate elements of
      requirements of the watershed plan.   These policies,  mechanisms, and
      requirements may be existing or newly-developed, but all must be in effect on
      the  date of program submission. The policies, mechanisms, and requirements
      should build upon, integrate, and be no less stringent than other sections of the
      CWA or other applicable federal and State laws.  Demonstrate the capacity to
      take administrative,  civil, and judicial enforcement actions as necessary,
      including treating  Federal facilities  as other facilities would be treated with
      respect to requirements in, or developed pursuant to, WMPs.

10.   Revise plans and actions as needed to achieve the necessary progress towards
      meeting environmental  objectives.
                                   - 55  -

11.   Notify all parties of their roles and responsibilities for implementing the plan.
                                    - 56  -

How should EPA and other Federal agencies with interests in watershed management
provide support and oversee State and local efforts?


Under this watershed approach, both the State watershed program and locally-based
watershed management entities would draw upon the resources, skills, and authorities
of their  many participants to  carry out their respective responsibilities within the
watershed planning and management context.

For example, within a hypothetical watershed management entity,  representatives
from the State might bring to  the table their expertise and authorities on managing
point sources and  nonpoint sources, and representatives from the U.S. Fish and
Wildlife  Service would provide expertise and authority on endangered species and
other living resources. Likewise, representatives from the Corps of Engineers would
bring expertise and authority on flood control and wetlands, and  local government
officials  would bring land use  management  expertise and  authorities.   Also,
landowners and public interest groups and interested citizens would bring their own
professional  expertise and personal convictions. The blend of stakeholders will vary
from watershed to watershed, but, if  planned  properly,  the team  will  identify
problems, set priorities, and conceive and implement solutions with the  necessary
authorities to meet environmental  objectives.

The challenge for Federal agencies in watershed management is two-fold:  first,  to
participate; and second, to provide incentives for watershed management; streamline
operations wherever possible, and provide adequate oversight of Federal expenditures.



+     EPA should confer with  appropriate agencies and issue guidance to the States
      for the design of their watershed programs.  The guidance should describe in
      detail  how States might best meet the minimum elements set forth in the Act.

+     In addition, Federal agencies should provide States and watershed entities with
      information on non-water quality considerations and national interests in them
      which may  be  appropriate for  consideration  in formulating environmental
      objectives, such as energy development and conservation, transportation, etc.
                                   -  57 -

      The statute should require States to submit their watershed program to EPA
      and provide that within 180 days of receipt, EPA-after conferring with other
      Federal  agencies to allow consideration of other national interests-should
      approve or disapprove the program.  Any disapproval should be in writing and
      should specify any modifications that are necessary for approval.  Approval
      would need to occur before States would be eligible for the benefits specified
      in the following discussion regarding incentives for watershed management.

      In any case where EPA disapproved a State program, the State should have six
      months to amend the program.
      Success of the watershed  program should be measured in terms of:   (1)
      environmental conditions; (2) programmatic changes; and (3) changes in risks
      to public health and living resources.

      Every year following State  watershed program approval, each State with a
      watershed program should submit a summary status report on accomplishment
      of action items, identification of environmental indicators (including indicators
      of physical, chemical, and biological health), and progress toward achieving
      environmental objectives specified in  the State watershed program.  To the
      extent practicable, Federal agencies should permit the use of State watershed
      program status reports to satisfy reporting requirements under other sections
      of the CWA and other Federal programs.

      Every five years following State watershed program approval, the States should
      submit a revised  State watershed  program.  EPA,  after  conferring  with
      appropriate Federal  agencies, could disapprove a revised  State watershed
      program if:

      o     the program did not meet the purposes of the watershed management
      o     the State was not meeting milestones as specified in  their watershed
            program schedule; or,
      o     the State was not making reasonable progress toward meeting its stated
            environmental objectives.

      As with initial program approval, any disapproval of a revised State watershed
      program should be in  writing and should specify  any modifications that are
      necessary for approval, and the State should have an opportunity to amend the
      program as specified by EPA.  EPA and other Federal agencies should advise
                                   -  58 -

      States  and local units on how to improve performance,  as appropriate.  In
      States  where plans were not being developed, or where WMPs are not being
      implemented, EPA could withdraw financial support and rescind incentives.

Revocation of Incentives

»•     If at any time EPA, after conferring with other Federal agencies, finds that—

      o    a State watershed program did not meet  the requirements  of  the
           watershed management provision;
      o    an approved State watershed program schedule is not being met; or
      o    the practices and measures proposed in watershed  management plans
           under the program are not adequate to attain the stated environmental

      then EPA should notify the State, in writing, of any revisions or modifications
      necessary to meet requirements of the watershed management provisions and
      hence to continue to receive  incentives. As with program approval and review,
      the State  should have  an opportunity to amend the program to meet  the
      requirements specified. EPA  should determine whether requirements have been
      met as expeditiously as possible. If EPA determined that the State had not met
      the requirements or if the State failed to submit a revised  program, then EPA
      could revoke such incentives as deemed appropriate.

Intergovernmental  Coordination

*     The statute  should provide  for the establishment of a committee-including
      representatives from  Federal, State,  and local governments~to coordinate
      support of watershed activities, including the  development and provision of
      technical tools and training to improve watershed management capabilities.

*     Although not  requiring a statutory amendment, Federal agencies should:
      participate in watershed-level management, use their authorities and coordinate
      their priorities to promote  watershed management, and, implement their
      programs  to  the  maximum   extent  practicable  in  accordance  with
      State-approved WMPs. In addition, Federal agencies should provide States and
      watershed entities information on non-water quality considerations and national
      interests, such as energy development and conservation, transportation, etc.,
      that may  be  appropriate for  consideration  in formulating  environmental
      objectives.  In those areas of the country that did not fall under the jurisdiction
      of States with approved watershed programs,  Federal agencies should use a
      watershed approach to the maximum extent practicable in implementing Federal
                                  -  59 -

      Because  the  watershed  program  would integrate  existing  authorities,
      enforcement responsibilities under the CWA would be applicable within the
      watershed  program through  the  individual authorities and responsibilities
      provided  under other  CWA sections.  For example, NFS pollution controls
      would be Federally enforceable in the watershed context through §319, and
      point source control enforcement responsibilities under § §402 and 404 would
      apply within the watershed context.
                                  -  60 -

What incentives are necessary to promote State adoption of watershed programs?


Significant  enthusiasm already exists for the watershed approach.  This may be
attributed to the fundamental logic of organizing water resource programs within
naturally-defined areas and a belief that the approach will help programs to operate
more efficiently and effectively.  In North Carolina, for example, both point and NPS
water quality issues are being addressed simultaneously under one plan for each of
seventeen basins. Other States and localities are incorporating such issues as water
quality, wetlands, ground water, drinking water, living resources, and flood control
into comprehensive basin management plans.  It is important to sustain the current
enthusiasm and commitment to the watershed approach at both the State and local

It must also be recognized that a great  deal  of effort may be required to achieve
programmatic changes and to implement a truly comprehensive approach with broad
environmental  objectives that may go beyond the scope of traditional water quality
standards.   For example, State  departments  that deal with  health,  agriculture,
fisheries, and the environment may need to coordinate and integrate assistance to and
participate in watershed management efforts.  In addition, States need to ensure that
plans will actually result in actions.

Currently, there are several separate grant authorizations that support water programs
under the CWA. Administering these separate grants with their distinct requirements
imposes a large burden on the States.  To comply with the requirements of the CWA,
each grant must be individually applied for, matched, managed, tracked, and closed
out.  These requirements  impose duplicative administrative procedures and thereby
divert scarce resources that States could allocate to water program implementation
activities. In addition, States must meet different matching fund requirements for
each of these grants.

For these reasons, financial and regulatory incentives need to be sufficient to ensure
widespread  application  in   accordance with the purposes  of  the watershed
management provisions of the Act.
                                   -  61  -


Recommendations for incentives for State  participation  fall within  two  major
categories: (1) incentives that require amendments to the CWA, and (2) those that
can be provided through administrative actions. Some incentives would be authorized
upon EPA approval of a State's management program; others  would be authorized
after additional conditions or approvals were met.
                 Incentives Requiring Amendments to the CWA
      The Administration proposes that the Act be amended to establish a "multi-
      purpose" State water grant.  States with approved watershed management
      programs would  be allowed  to apply for a multi-purpose grant that would
      provide single application, work plan and review, matching, oversight, and end-
      of-year close-out requirements.  Consolidating these requirements would allow
      States to focus activities funded under different statutory authorities [sections
      104(b)(3), 104(g), 106, 314(b), 319, and 604(b)] in watersheds on a priority
      basis consistent  with approved State watershed management programs.  In
      addition, under the multi-purpose grant provision, States should match Federal
      funds at 40 percent in Fiscal Year 1995 and 50 percent in Fiscal Year 1996
      and beyond.

      The Act should expand SRF priority systems and project priority lists to include
      all SRF-eligible activities, and should  encourage States to include among the
      factors considered in  the SRF priority  system projects contained  within
      approved watershed management plans. (See the discussion "Project Targeting
      and Priority Setting" in the Chapter on Funding.)

      Section 604(b) should be amended to allow States with approved watershed
      programs to reserve, specifically for watershed management planning, an
      additional two percent over the currently authorized "planning" reservation of
      one percent of the funds allotted under §604.
     Also, the statute should reserve a significant percentage of any future increases
     to funds annually appropriated under §319(h) to support the implementation of
     NPS pollution control measures under State-approved watershed management
                                  - 62  -

Nonpoint Source Controls

>     The Administration proposes revisions to  §319 that would provide for the
      application of best available management measures to both existing and new
      sources in impaired and threatened watersheds and to new sources in all other
      watersheds. States should establish best available management practices as set
      forth in national guidance by EPA or equivalent site-specific plans  under the
      Administration's proposed NPS program unless they can identify alternative
      nonpoint source management practices or methodologies for developing such
      practices that will  attain the environmental objectives established  under the
      watershed program,  including water quality standards, as expeditiously as
      practicable, but not later than 15 years after enactment.  To be eligible for this
      incentive, States should show that they will employ an iterative approach so
      that alternative nonpoint source controls are implemented within ten years of
      enactment, followed  by monitoring and by additional controls if necessary.

      Alternative practices or methodologies should be submitted to EPA for approval
      not later than two and one half years after  enactment.  If EPA approves such
      alternative  practices or methodologies, then  the  State's nonpoint source
      management  program  may  rely  on  such  practices of  methodologies.   All
      alternative watershed nonpoint source control practices and milestones for
      implementation  would  need to  be identified  in the appropriate watershed
      management plans adopted under the  State's watershed program.

+     In  accordance with  the Administration's  proposal  for NPS controls, NPS
      controls  would  need to be  backed by adequate policies, mechanisms, or

>     If for any reason the NPS incentive were revoked by EPA, then the State would
      need to submit a revised NPS program in accordance with §319, as  amended,
      no later than one year after the final notice of revocation.

Point Source  Control Permits

*•     For States with approved watershed programs, the Act should allow, at the
      State's discretion, a one-time extension of NPDES permit terms up to five years
      beyond the current NPDES permit expiration date to give States flexibility to
      align the timing of permits for point sources within watersheds.   However,
      facilities  would  still be required to timely  submit a permit application, and
      States would retain the authority to immediately reissue a permit to any facility
      if the  permit application indicates  an impairment of  water  quality.  The
      permitting authority  could  revoke the extension and  issue a new  permit
      requiring immediate compliance if the permitting authority~at any time during
                                   -  63  -

      the extended term of the permit-determined that additional permit limits were
      necessary to control potential negative impacts of the facility.

 >•     In addition, in watersheds with State-approved watershed management plans,
      the statute should allow EPA, or any State with §402 permit authority, to issue
      a 10-year permit to any point source located in the watershed, if water quality
      standards were being met in the waters to which the point source discharged
      at the time  of permit issuance and if, for  the period encompassed by the
      permit, the plan provided for the maintenance of water quality standards.

 >     Finally, the  Act should allow that an amount equal to the fees collected
      pursuant to proposed subsection 402(s) may be discounted from the required
      amount of State matching funds for Federal funds made available to the State
      pursuant to section  106 if the State had an approved watershed program.


>     In the event that the CWA continues to require a triennial review process, the
      statute should extend the period for a comprehensive review and revision of all
      use designations, criteria, and antidegradation policies to five years for States
      with approved watershed programs.  This longer period of review would allow
      for  additional flexibility in review time to provide greater consistency with
      watershed planning efforts.

Federal Consistency

»•     To the extent that a State-approved watershed management plan imposed new
      requirements that were not otherwise provided under sections 301, 302, 303,
      306, and 307, or any State law, §401 should provide the State authority to
      certify whether Federal permits or licenses comply with such requirements.

Drinking Water  Requirements

»•     The Administration proposed changes to the  Safe Drinking Water Act (SDWA)
      that would allow for tailored prevention, monitoring, and treatment alternatives
      where watershed protection measures had been taken to protect drinking water
      sources.   If  such proposed  changes  were  incorporated into the amended
      SDWA, alternative regulatory approaches would be allowed within watersheds
      provided the State-approved watershed management plans met all source water
      protection conditions of the amended SDWA.
                                   -  64 -

              Incentives Provided Through Administrative Actions

Multi-year Work Plans

>•     Alignment and streamlining of grant cycles and procedures,  and provision of
      multi-year planning would reduce paperwork and otherwise simplify watershed
      management  activities.  Because no change to the CWA  is necessary to
      accomplish this,  EPA  will pursue the establishment of this incentive in
      administrative contexts.

Streamlining Operations

+     To the maximum extent feasible, approved State watershed  programs would
      fulfill inventory, ranking, planning, and reporting requirements under §208,
      §303(d), §303(e), §30S5(b), §304(1), §314, §319, §320 and  other programs,
      such as Wetland Conservation Plans,  USDA River  Basin Plans, and State
      Coastal Nonpoint Pollution  Programs under the Coastal Zone Management Act
      Reauthorization Amendments of 1990, provided that the State  watershed
      programs met the particular requirements of the other programs listed above.

Technical and  Financial Support for Wetlands Protection

>     State-designated  watershed management entities  requesting support for
      wetlands identification and mapping, functional evaluation, restoration planning,
      and/or private or public  initiatives  would be  considered high priority for
      receiving Federal technical and financial support.
                                   - 65  -

 Consistent with Vice President Gore's National  Performance Review, how should
 pollutant trading be encouraged and implemented in the reauthorized CWA to promote
 market incentives that reduce pollution?


 Trading programs are proving to  be a successful and cost-effective approach for
 reducing air pollutant emissions under the Clean Air Act. Similarly, trading of pollutant
 reduction credits among different sources and other market oriented mechanisms like
 bubbles or averaging will offer an important means to lower the cost of meeting CWA
 goals. In fact, several case studies in North Carolina, Colorado, and Wisconsin show
 that the trading of pollution credits holds considerable promise  for reducing  water
 pollutant loadings, particularly nutrients.  As many as 943 water-quality limited water
 bodies could benefit from nutrient trading.5

 Under trading, sources with low control costs would make arrangements with sources
 facing high control costs. The low-cost sources would undertake  additional pollutant
 reductions in exchange for financial compensation from the  high-cost sources.
 Sources with higher abatement costs would undertake  less control efforts,  while
 acquiring additional reductions from other, lower-cost sources.

 Trading agreements involving the exchange of pollution reduction responsibilities may
 take many forms. Dischargers might for example pay for upgrading on site treatment;
 finance nonpoint source controls directly; contribute to a fund to implement nonpoint
 source controls individually or on a  basin-wide scale; contract  directly  with third
 parties  or sources to install and/or maintain nonpoint  source  controls;  negotiate
 directly with other sources (point or nonpoint) to achieve needed water quality-based
 pollution reductions; agree to alter  behavior; or pu~chase land or facilities for purposes
 of instituting or enhancing treatment.

 Since the success of trading programs depends on the voluntary  participation of
 independent  sources, the responsibilities of  trading partners need to  be carefully
 defined. Trades should shift the responsibility for the agreed to controls entirely from
the buyer to the seller, who would  then be subject to enforceable requirements
stemming from the trade itself.
   5 See Podar, M., and M. Luttner,  "Economic Incentives in the Clean Water Act:
Some Preliminary Results", presented at the Air and Waste Management Association,
June 1993.

                                   - 66  -

Successful trading requires that the costs of transacting trades be kept low. Criteria
for prior approval can facilitate trades by reducing the costs associated with delays
and  uncertainty  over  what  trades  might be  considered  valid  by enforcement

Another important element of  transactions costs is the additional monitoring  of
loadings reductions that may  be associated with a trade.  Such monitoring may  be
quite costly for many nonpoint sources.  Reasonably reliable and unbiased estimates
of loadings derived  from models  of runoff may be  adequate in lieu of on-site
monitoring but this issue should be the subject of further study.

For those  pollutants  for which total maximum  daily loads (TMDLs) are established
under CWA Section 303(d), the TMDL process can be used  as a basis for trades.6
  Once a TMDL has been established, sources of pollution may exchange, trade, buy
or sell  reductions within the geographic area covered  by the TMDL.  Point source
effluent limits can be designed to meet water quality goals and at the same time
reflect trading agreements among the pollution sources.

Trading may occur among point sources, between point sources  and  non-point
sources, or among nonpoint sources.  It might even include inter-media trading, if, for
example, emissions through air deposition  contribute to water pollution.  Nonpoint
source trading is especially important because the control costs may be substantially
less than those for point sources, although issues related to the measurement and
timing  of loadings need to be  addressed.

A final possibility for trading is among indirect industrial dischargers who discharge
to a given publicly owned treatment works.  Since such discharges all enter the
environment at a single discharge point, the possibility of "hotspots" of pollution is


>     EPA should conduct a study to assess trading opportunities  for conventional
      pollutants, between pollutants with similar environmental effects,  for toxic
      pollutants, between different  media, and among a variety of point and non-
      point sources.  The study should  also evaluate how best to implement such
   6  TMDLs are the maximum loadings that a waterbody can assimilate without
violating water quality standards.

                                   -  67  -

The Act should authorize EPA  to publish a guidance document, using the
results of its study and after conferring with Federal and State agencies, about
trading  of pollutants.  The guidance should:

o     establish criteria to allow for prior approval of trades by State permitting
      authorities and by agencies that administer control programs,

o     specify that trades shall not violate water quality standards,

o     specify that where water quality standards are not met, trades based on
      TMDLs may still take place,

o     identify settings in which reasonably accurate and unbiased estimates of
      pollutant loadings based on models may be suitable for use in trades that
      the high cost of on-site monitoring would otherwise prohibit,

o     clarify that the anti-backsliding clause of the CWA (Section 402(o)) does
      not prohibit trading, and

o     authorize  trading among  indirect  industrial dischargers to  the same
      publicly owned treatment  works.

EPA should report to Congress about the likely environmental and economic
costs and  benefits of trades that would allow sources to increase  on-site
pollutant loadings above more stringent technology-based effluent limits.

EPA should be authorized and directed to  undertake demonstration projects to
implement inter-media pollutant trading in order to evaluate the environmental
and economic benefits of such pollution trading. Some of these projects will
demonstrate the concept of "risk bubble," for which a facility emitting pollut-
ants to more than  one medium is permitted to  meet overall health and
environmental risk reduction targets by obtaining pollution reductions anywhere
within the  facility,  irrespective of  receiving media.    Other projects  will
demonstrate the concept of "inter-media loadings trading," a program allowing
TMDLs  in a watershed to be met (or maintained) by sources trading loadings
reductions  irrespective of the original receiving medium.   For instance,  an
electric  utility with nitrogen dioxide emissions that contribute to fertilization of
the Chesapeake Bay could meet its nitrogen dioxide reduction targets by paying
farmers to reduce fertilizer use. No projects should be undertaken without the
prior consultation and consent of the appropriate State, Territorial, or Tribal

The  Administrator should regularly confer with  the States  on the activities
under this section, and, within four years of enactment, submit a report on the
                              -  68  -

environmental and economic benefits  and costs of the projects above to
Congress and participating states. The report should identify existing technical,
regulatory, and financial impediments to adopting such approaches examined
in the projects and shall make recommendations, as appropriate, to facilitate
their adoption.
                             -  69 -

How can the Clean Water Act empower local efforts to restore urban waterways,
especially those in communities that have  been disproportionately impacted  by
environmental degradation?


While rivers, streams, and lakes in the nation's metropolitan areas supply drinking
water  to  200 million U.S.  citizens  and together  with  urban wetlands, provide
recreational opportunities for millions more, these waters are among the nation's most
degraded. Channelization, runoff from nearby agriculture, runoff from city streets and
lawn care, spills from trash disposal, removal of important nearby  vegetation, and
combined sewer overflows pose unique threats to rivers and streams running through
the nation's cities.

While a number  of provisions within  the Clean Water Act  already address certain
aspects of urban river pollution including urban storm water, nonpoint sources,
combined sewer overflows, and  water quality  standards,  the  severity of  the
degradation calls for specific attention to directly address problems unique to many
urban communities.  The benefits of an urban restoration program extend beyond safe
drinking  water  and include opportunities  for  recreation,  subsistence fishing,
employment and economic development.

Experience demonstrates that urban river restoration efforts are most successful if
carried out by those living on or  near the streams in conjunction with a state or local
conservation corps and State and local government entities.  Technical assistance can
be provided by the many successful state urban restoration programs or by federal
agencies, such as the National Park Service's Rivers and Trails Technical Assistance
Program, which has great expertise and experience through its "Metropolitan Rivers"


Amendments to the Clean Water Act should emphasize restoration of urban waters

*-    encouraging States to give urban watersheds a high level of priority in their
     State-wide ranking of watershed initiatives;

>    requiring States to monitor and report on the quality of urban waters when the
     States submit periodic reports to EPA on water quality;
                                   -  70 -

authorizing the use of the State Revolving Loan  Fund to support riparian
restoration in urban waters; and

encouraging neighborhood or regional nonprofit watershed citizen groups and
councils  to develop consensus watershed  restoration  strategies, conduct
volunteer monitoring  programs, and  build  long-term commitments  within
communities to protect water resources.
                             - 71 -

                  CHAPTER  5--ENFORCEMENT



Should the CWA's civil judicial enforcement provisions be modified in several ways
to improve the United States' enforcement capabilities?


Establishing Economic Benefit as a Minimum Penalty Requirement

The CWA provides that any person who violates the Act shall be subject to a  civil
penalty, which may be imposed judicially under CWA §309(d) or administratively
under §309(g). Section 309(d) and (g) establish statutory maximum penalty amounts
and provide factors to be considered in assessing penalties, one of which is the
economic benefit obtained by the violator through the violation.  These sections do
not mandate the imposition of any minimum penalty, however, and thus allow a court
or administrative law judge to award  penalties that do not recoup a violator's
economic benefit,  which in fact, has happened in recent cases.  Such decisions
undermine the deterrent value of penalties under the Act, making it economically
advantageous to violate the CWA. The  Act would also be strengthened if, in those
instances  in which the economic benefit of noncompliance exceeded $25,000 per
violation per day, the court were still required to order a penalty sufficient to recoup
economic benefit so as to ensure that no violator profits from noncompliance.

Examples  of Appropriate Injunctive Relief

CWA §§309(b)  and 505 authorize the United States and citizens, respectively, to
seek injunctions to redress violations of the Act.  These sections provide no specificity
as to the type or nature of the measures that a court may order in an injunction.  The
United States takes the view, particularly in the context of §309(b), that a court may
order any  measure designed to effect compliance or to remedy the harm caused by
a violation. With respect to remediation, the Administration recognizes that court-
ordered remediation must have a net environmental gain and must not conflict with
clean-up activities under other federal statutes.  This view could be better supported
if there were greater specificity in §§309(b) and 505 on this point.

Entitlement to Equitable Relief

Some cases have interpreted the CWA to require that the traditional common law test
for issuance of an injunction must be met before a Federal court may enjoin violations
of the CWA. The test for a permanent injunction is: (a) failure to issue the injunction

                                   -  72  -

would result in irreparable injury; (b) legal remedies are inadequate; (c) issuance of the
injunction is in the public interest; and (d) the benefits of enjoining  the defendant
outweigh the injuries that will result. This traditional equitable test can be difficult to
meet in  environmental cases in which evidence of  environmental  harm is often

Anticipatory Enforcement

CWA §309(a)(3) authorizes EPA to issue an administrative  order or commence a
judicial action when a person "is  in violation" of the  CWA.  The section does not
expressly authorize EPA to act prior to a violation to prevent its occurrence or lessen
the harm that may result from it.  In contrast, many Federal laws authorize Federal
agencies to enforce to prevent threatened or anticipated violations.  For example, EPA
is presently authorized to take enforcement action to prevent anticipated violations of
the SDWA.

Recovery of Enforcement Costs

Currently, the CWA (and the Oil Pollution  Act (OPA) for action taken  under CWA
§311) does not authorize the government to recover the costs of enforcement and
oversight of cleanup and  compliance measures. The Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA) and CWA §311 allowthe United
States to require responsible parties to conduct such clean-ups or to conduct its own
cleanup  of  oil and  hazardous substance spills financed by a government fund.
CERCLA further  allows the government to recover costs from responsible parties,
including the costs of bringing enforcement and overseeing cleanups. Similarly, the
OPA allows the government to recover removal costs from responsible parties.

In Rem Authority Over Polluters

Unlike many other statutes  governing vessel owners or operators, §311 does not
provide  the government with in rem authority for enforcement. Many violators of
§311 are asset poor, except for the vessels they own or operate, and in many cases
such as  those involving  foreign violators,  other  assets  are  difficult to encumber.
Enabling the U.S. to seize the  assets of such violators is essential to control  such
                                   - 73  -


The Administration recommends that the CWA be amended as follows:

Establishing Economic Benefit as a Minimum Penalty Requirement

*     Amend  CWA  §§309, 311(b),  and 404(s) to require that a court in a civil
      penalty   proceeding,  and  an  Administrative  Law  Judge  in  a  class  II
      administrative penalty proceeding, must, at a minimum, impose a penalty that
      recoups the economic benefit, if any, that accrued to the violator as a result of
      the violations.  This rule would be subject to exceptions for  cases against
      publicly and Federally owned treatment works. Further, amend these sections
      to revise the  statutory maximum penalty  in civil judicial cases such that
      whenever the  economic  benefit  amount, if  any,  exceeds  the  statutory
      maximum of $25,000 per day of violation, the economic benefit amount will
      supersede the  $25,000 per day  of violation statutory maximum.   Finally,
      require  EPA to undertake a study of its  economic benefit model,  and its
      application  to private and public entities.

Examples of Appropriate Injunctive Relief

>•     Modify CWA § §309(b) and 505(a) to specify the types of injunctive relief that
      are appropriate for the court to order, including remediation of environmental
      harm associated with  violations through such measures that include (but are
      not limited to):  removal  of  dredged or  fill  materials and  contaminated
      sediments,  clean-up of waterways  and  banks of  waterways  of  illegally
      discharged  pollutants,  environmental auditing,  installation of temporary or
      permanent treatment facilities, prohibition of additional sewer or wastestream
      connections, and temporary or permanent cessation of activities related to—and
      that caused-the violation.   The cost of  compliance with an injunction to
      remediate the  environmental harm associated with violations should not be
      capped  at the maximum civil penalty.  In actions under §505(a), the  court
      should be required to notify EPA and allow EPA an opportunity for comment
      before issuing an order requiring remediation of environmental harm, to ensure
      net environmental benefit  from the remediation and to avoid  duplication or
      inconsistency with clean-ups under other federal statutes.

Increase the Judicial  Maximums for §311 Civil Penalties

      To conform with increased administrative penalties under §311, increase civil
      judicial penalties authorities as follows:

»•     CWA  §311(b)(7)(A)  should be amended to increase the statutory maximum
      penalty  available in  a  civil judicial  action  for discharge of a barrel of  oil or
                                   -  74  -

      reportable quantities (RQ)  of hazardous substance from $25,000 per day of
      violation and $1,000 per barrel of oil or RQ of hazardous substance discharged
      to  "$100,000 per day of violation  and $3,000 per barrel of oil or RQ of
      hazardous substance, whichever is greater." "Whichever is greater" should be
      added to clarify the existing, ambiguous language, not to increase the penalty

*     CWA  §311(b)(7)(D) should be amended to increase the statutory maximum
      penalty available in a civil judicial action for discharge of a barrel of oil or RQ
      of hazardous substance that results from gross negligence or willful misconduct
      from not less than $100,000 or not more than $3,000 per barrel of oil or RQ
      of  hazardous substance discharged  to "not less than $500,000 per day of
      violation and $5,000 per barrel of oil or RQ discharged, whichever is greater."

Entitlement to Equitable Relief

>•     Modify the Act to require a district court to issue an order for compliance upon
      a finding of liability in every CWA civil case, unless the defendant establishes
      a high probability that  violations will not recur.  The  court would retain
      equitable power to fashion an appropriate remedy. Further, the traditional tests
      for determining whether to issue a temporary restraining order or a preliminary
      injunction would continue  to apply.

Anticipatory Enforcement

>•     Modify CWA §309(a) to authorize EPA to issue an administrative compliance
      order and bring a civil action for injunctive relief for anticipated violations of the
      Act.  To be actionable, an anticipated  violation would have to be "clearly
      foreseeable."  A compliance order issued for anticipated violations should be
      enforceable in court.

Recovery of Enforcement Costs

+     Modify CWA §309 to authorize the Department of Justice,  EPA, the Corps of
      Engineers, and the  Coast Guard  to  recover  from the violator the costs of
      bringing enforcement actions and of administering compliance and cleanup
      measures.  Any  costs recovered would be deposited into the U.S. Treasury.
      Also modify CWA §311 (b) and §1002 of the Oil Pollution Act to authorize the
      Department of Justice, EPA, the Corps of Engineers, and the Coast Guard to
      recover from  the violator the  costs of bringing  §311  civil judicial  and
      administrative enforcement actions.  Any such costs recovered under the OPA
      for activities under CWA §311  would be deposited into the Oil Spill Liability
      Trust Fund.  These costs should not be recoverable in CWA administrative
                                   -  75 -

      enforcement actions brought by EPA, the U.S. Coast Guard, or the Army Corps
      of Engineers against Federal facilities.

Provide In Rem Cause of Action

»•     Amend §311(b)(6) to include a paragraph providing that any vessel operating
      in violation of §311 shall be liable for any civil penalty or criminal fine assessed
      for the violation.  Amend §311 (b){7)  similarly to provide for such a remedy in
      instances where an owner or operator has failed to comply with a response
      order issued under §311 (c) or §311 (e). Provide venue in any district court in
      which the vessel may be found.


>•     CWA §309(e) requires the United States in any civil judicial enforcement action
      against a municipality to join as a party the State in which the municipality is
      located.  The State is  then liable for any judgment that might be imposed
      against the municipality, to the extent that  laws of the State prevent the
      municipality from raising revenues needed to comply with the judgment. The
      purpose is to assure that municipalities are not prevented from complying with
      the CWA by funding restrictions imposed on them by the State.  In many
      actions, however, the ability  of the municipality  to  satisfy the judgment
      obtained against  it is  not in  issue.   In  such  cases, joining the State  is
      unnecessary and only serves to increase litigation burdens on all concerned.
      Accordingly, CWA §309(e) should be  modified to remove the requirement that
      the State  always  be joined as a party in suits brought by  the U.S. against
      municipalities.  Instead, §309(e) should give the U.S. discretion to seek to join
      States when State law could interfere with a municipality's ability to satisfy a

>•     Amend the CWA to assure that the five year statute of limitations applicable
      to penalties, set forth at 28 U.S.C. §2462, is not applicable to injunctive relief.

>     CWA  §509(b) precludes judicial  review in an enforcement  action of  certain
      decisions by EPA, such  as promulgation of certain regulations or issuance of a
      §402 NPDES permit, which could have been otherwise challenged in a separate
      judicial proceeding. The effect of this provision is to prevent, for example, a
      defendant from raising  as a defense  to an action for violating a permit that
      terms in  the permit  were  improperly imposed.  This provision should  be
      extended to preclude judicial review  in an EPA enforcement action of State
      decisions, such as State issuance of NPDES or 404 permits, which could have
      been otherwise challenged in State court.
                                   -  76  -

CWA §307(d) makes it unlawful to discharge wastes to  a  publicly  owned
sewage treatment plant in violation of any effluent standard or prohibition or
pretreatment standard promulgated under §307. EPA has taken the view that
ordinances enacted by a local POTW authority that are designed to  ensure
compliance with the POTW's approved pretreatment program ("local limits") are
within §307(d)'s enumeration, hence are Federally enforceable.  Sections
307(d), 309(a) and 309(c) should all be amended to clarify that all pretreatment
standards and requirements, whether in  Federal regulations, Federally issued
pretreatment permits, federally approved State or local pretreatment programs,
or State or local pretreatment permits issued pursuant to a Federally approved
pretreatment program  are all  Federally enforceable in administrative, civil
judicial, and criminal proceedings. This section should also be revised to state
expressly that it covers violations by any person,  regardless of whether that
person is an owner or operator.

Amend the CWA to  authorize  a court in judicial  cases, and  EPA, the Coast
Guard, and the COE in administrative cases, to pay an award, out of  penalties
imposed,  for information  that  results in imposition of a   civil  penalty for
violations of the Act.  Such awards would be made only if information provided
materially assisted the United States in obtaining the civil penalty or injunctive
relief and should be limited to a maximum of 45% of the penalty imposed by
the court or hearing officer. EPA already has such authority under the Clean
Air Act (CAA) and CERCLA.

For purposes of calculating an appropriate civil penalty, add to the  factors
currently to be considered under CWA  §§309(d), 309(g)(8),  and 402(s)(4),
"any penalty already  assessed for the same violations." The economic-benefit
minimum  penalty could be reduced  by any penalty already assessed  for the
same violation. Also amend §311 to change "any other penalty for the same
incident" to "... same violations."

Amend sections 404(s) and 309(g) to clarify the U.S. Army Corps of Engineer's
authority to bring enforcement actions for unpermitted discharges of dredged
and fill material in violation of  CWA §301 (a).
                             -  77 -

                           FEDERAL FACILITIES
 In April 1992, the U.S. Supreme Court ruled in Department of Energy v. Ohio. 503
 U.S. --,118 L.Ed.2d 255 (1992), that the United States had not waived its immunity
 to punitive penalties, i.e. penalties for past violations, under either the citizen suit
 provision or the Federal facility provision of the CWA or the Resource Conservation
 and Recovery Act (RCRA).  in October 1992, partially in response to the DOE v. Ohio
 decision, Congress passed the Federal Facility Compliance Act which (1) waived the
 Federal government's immunity from penalties for violations of RCRA and (2) provided
 EPA with administrative order authority against Federal facilities.  However, sovereign
 immunity under the CWA was left unaddressed by this legislation. How should the
 CWA be amended with regard to  compliance of federal facilities?


 Federal Facility Compliance Rates Under the NPDES Program

 In December, 1988, the General Accounting Office (GAO) released a report entitled
 Water Pollution: Stronger Enforcement Needed to Improve Compliance at Federal
 Facilities. The  report stated that  the Federal facilities' rate of noncompliance with
 CWA program requirements was twice that of non-Federal industrial facilities.  Current
 compliance data indicates that improvements have been made in compliance since the
 1988  GAO  Report, but that  Federal facilities  consistently  demonstrate higher
 Significant Non-compliance rates than private facilities. GAO cited the low priority
 that Federal facilities  have  assigned  to  compliance  with  pollution  discharge
 requirements and corrective action as fundamental barriers to CWA compliance at
 these facilities.

 The report also noted that both regulators and Federal agency officials agreed that
 enforcement actions against non-compliant Federal facilities resulted in increased
 priority of environmental compliance and prompt corrective action.   EPA regional
 officials stated  that the reason they do not often take enforcement actions against
 Federal facilities in authorized States, where the State does not act, is that the limited
 enforcement tools available to EPA at Federal facilities impede timely and effective
 resolution of enforcement actions.  GAO noted a reluctance among EPA regional staff
to use  negotiated compliance agreements at Federal facilities and a tendency to rely
on State administrative or judicial actions to ensure compliance. However, due to the
DOE v. Ohio decision, incentives for State and citizen enforcement are limited (see
discussion below). The Administration recognizes that enforcement is only one tool
being used in achieving compliance at Federal facilities and supports efforts by Federal
facilities to achieve compliance through pollution prevention, self auditing, and other
                                   -  78  -

Department of Energy v. Ohio: Overview and Effect

On April 21, 1992, the United States  Supreme Court held that Congress had not
waived Federal sovereign immunity from liability for civil, "punitive" fines imposed by
a State for past violations of the CWA.  The Court distinguished between "punitive"
fines and "coercive" fines, holding that  Federal agencies could be liable for fines
imposed by courts to induce them to comply with injunctions or other judicial orders
designed to modify behavior prospectively. The Court determined that (1) §313 of
the CWA does not subject Federal facilities to statutory penalties despite the word
"sanction" in the section, and (2) fines provided for in State statutes that are part of
a Federally approved State  permit program  do not "arise under Federal law" as
required under the waiver of sovereign immunity set forth in the CWA. A subsequent
case,  Sierra Club v. Lujan. 972 F.2d 312 (10th Cir. 1992),  further held that even
when the Federal government has violated a permit issued directly by EPA "under
Federal law," the result is the same-no waiver of sovereign immunity for punitive

Pursuant to these cases, States cannot obtain penalties from Federal facilities for past
violations of the Act. Despite the GAO finding that enforcement actions against non-
compliant Federal facilities result in increased priority of environmental compliance and
prompt corrective action, the deterrent value of punitive fines is not in the arsenal of
State and citizen enforcement tools- EPA's enforcement tools are also limited under
the Act due to the absence of an effective administrative  procedure for Federal
facilities enforcement.


The Administration recommends that the CWA be amended as follows:

>     Amend  §313 of  the  CWA to clearly waive the  United  States' sovereign
      immunity (for violations occurring after the effective date of the amendments)
      to allow citizens (including  States acting as citizens) to seek penalties for all
      CWA violations by Federal facilities for which a private person would be liable
      and  to  allow States  to  obtain  penalties for Federal facility violations of
      requirements in State water  laws  respecting the control and abatement of
      water pollution when those penalties would go to a State environmental trust
      fund.  This amendment would parallel the  Federal Facility Compliance Act,
      which clarified the waiver of sovereign immunity under RCRA.

>     Amend §502(5) of the CWA to include the  United  States in the definition of
      "person."  Amend §311(a)(7) to include the United States in the definition of
      "person" for enforcement purposes only.
                                   - 79  -

 Amend §309 of the CWA to establish an administrative enforcement process,
 based on the §3008 of RCRA and the Federal Facility Compliance Act, that will
 allow EPA to: issue compliance orders to Federal facilities; enforce these orders
 through the administrative hearing process;  and,  assess penalties against
 Federal agencies for violations of the CWA and the orders.

 o     This  administrative enforcement  provision would mirror the RCRA
       enforcement provision, creating a single administrative process for RCRA
       and CWA enforcement at Federal facilities.

 o     The provision would ensure that Federal agencies have an opportunity
       to contest  administrative orders through  the  administrative  hearing
       process established at 40 CFR  Part 22,  thus granting Federal agencies
       access to a formal hearing similar to the judicial hearings available to
       non-Federal entities.

 o     The respondent Federal agency should  have an opportunity to confer
       with EPA prior  to  an order or a field citation against a Federal facility
       becoming final  as  is provided in the Federal Facility Compliance Act.

 o     Citizen actions  would be precluded to the extent that the Administrator
       or the Secretary of the Army had initiated and was pursuing or had
       completed an administrative enforcement action against a Federal facility
      for the same violation.  In any such action interested persons should
       have   an   opportunity  for   notice, comment,  and  under  certain
      circumstances,  intervention.   This preclusion  would  not apply to
      allegations of imminent and substantial  endangerment in citizen suits
      unless the Administrator has commenced and is diligently prosecuting an
      administrative action against a federal facility under Section 504.

All funds collected by a  State from the Federal Government for violation of
substantive or procedural requirements referred to in subsection (a) of section
313  of this  Title  would be used by the State  only for projects designed to
improve or protect the environment or to  defray the costs of environmental
protection or enforcement.

In any case, the amendments  should not alter in any  manner  existing
agreements,  permits,  compliance  agreements, or administrative or judicial
                             - 80  -

The amendments should not affect existing  provisions stating that Federal
employees are not personally liable for civil penalties resulting from acts or
omissions within the scope of their official duties, and that Federal employees,
but not  Federal departments or agencies,  should  be subject to criminal
                             -  81 -

                        CRIMINAL ENFORCEMENT
There are several important criminal enforcement issues which should be addressed
by any reauthorization and amendment of the CWA.  First, the knowing endangerment
provision should be strengthened and improved, especially in light of two recent,
unfavorable judicial decisions.  Second, the felony  sanctions for knowing violations
of the  Act should be increased, consistent with similar provisions in the hazardous
waste  and clean air areas. Third, the false statement provision should be improved.
Finally, amendments are  recommended with respect to disposition of criminal fine
money, to permit citizen awards, fine-sharing with  States.

Experience gained  over time indicates that these  and other criminal enforcement
provisions require clarification,  refinement, or upgrading, as set out below.


CWA §309(c) provides that criminal sanctions can be imposed for four principal types
of violations under the CWA:   negligent violations; knowing violations; knowing
violations that place another person in imminent danger of death or serious bodily
harm; and, knowing false  statements or tampering with a monitoring device required
by the  statute.

Criminal prosecutions under these provisions are intended to punish violators and
deter future violations of the CWA.  The threat of criminal sanctions for negligent or
knowing failures to comply helps to ensure that those subject to the requirements of
the CWA behave in an informed and attentive manner, and are held accountable if
they do not.


The Administration recommends that the CWA be amended as follows:

Knowing  Endangerment

>     Revise CWA §309(c)(3)(A) to overrule the result in United States v. Borowski,
      977 F.2d  27 (1st  Cir.  1992),  reh'g denied (1993), which interpreted the
      knowing endangerment provision in an unduly restrictive manner. What the
      government  should  be  required  to  prove  for a  knowing  endangerment
      conviction is that the defendant committed a predicate felony and that he knew
      at the time that, in connection with, or in the  course of, committing that crime
      he placed another person in imminent danger of death or serous bodily injury.
                                   -  82 -

      CWA §309(c)(3) should be amended to provide that any knowing violation of
      the Act, punishable  under  §309(c)(2), is a  predicate offense  for knowing

      Delete the subsection which provides for an  affirmative defense to knowing
      endangerment based  on  "consent" and "reasonable  foreseeability."   The
      defense was developed originally to apply to a Title 18 knowing endangerment
      crime (never enacted), which did not include a predicate offense,  but punished
      any conduct (whether illegal or not) that caused endangerment.  The defense
      (which also  appears  in RCRA  and the CAA) is inappropriate as applied to
      knowing endangerment  crimes that require  proof of a predicate offense.
      Moreover, it is poor public policy under any environmental statute to allow a
      person who has committed a felony to claim as a defense that another person
      consented to being a victim of that felonious  act.

      Clarify that,  for  purposes of subsection  309(c)(3) only, "imminent danger"
      means the existence of a  condition or combination  of conditions which could
      reasonably be expected  to  cause a threat of death or serious  bodily injury
      unless the condition is remedied. This is necessary to overrule the unfavorable
      decision  in  United States  v.  Villeaas.  784  F.  Supp.  6 (E.D.N.Y.  1991),
      conviction reversed on other grounds,  (2d Cir. 1993) (petition for rehearing
Felony Sanctions
      Amend CWA §309(c)(2) to increase the maximum sentence for knowing
      violations from the present maximum of 3 years to 5 years for a first offense
      (doubled for second offenses).  In recent years,  Congress has provided that
      knowing violations of the RCRA,  and of the  CAA, are punished as 5-year
      felonies.  Crimes involving water pollution are as serious as air pollution or
      hazardous waste crimes, and sanctions should be equivalent.
Second offenses
      Amend CWA §309(c)(1), (c)(2), and (c)(4) to clarify that a previous conviction
      under any of these provisions, or under §309(c)(3), will result in enhanced
      "second offender" sanctions upon subsequent prosecution under any of these
False Statements
      Amend  CWA  §309(c)(4),  in  a manner  similar  to its  CAA  and  RCRA
      counterparts, to attach felony sanctions to knowing acts of omission and to
      increase sanctions to 5 years of imprisonment and $50,000 per day of violation
                                   -  83 -

      with a doubling of maximum  sanctions for second offenses.  This should
      include the knowing omission of required material information from  required
      documentation, certifications, or reports; knowing failure to maintain  required
      records; and knowing failure to install, operate, or utilize required monitoring
      methods, equipment or devices.

Disposition of fines

>     Add to  CWA  §309(c)  a  new  provision  authorizing the court,  upon
      recommendation of the United  States, to pay awards from fines assessed, to
      persons providing information that results in criminal conviction for violation of
      the CWA. Such awards would be made only if information provided materially
      assisted the United States in obtaining the criminal conviction. For examples
      of citizen award provisions, see, CERCLA, the CAA, the Act  to  Prevent
      Pollution from  Ships, the Refuse Act, and the Endangered Species Act. Such
      provisions can aid Federal law enforcement efforts by providing citizens with
      extra incentives to report possible violations of the  relevant laws.

>•     Add to  CWA  §309(c)  a  new  provision  authorizing the court,  upon
      recommendation of the United  States, to pay any State or municipality giving
      material support to the prosecution, a portion  of the fine assessed. The U.S.
      has received invaluable assistance from State  and local agencies in a number
      of its prosecutions, but providing such assistance can be very expensive to
      State and local governments given their resource limitations. State and local
      governments would be more inclined to support federal efforts if those resource
      expenditures were more likely to be returned to them.
                                   - 84  -


 Effective administrative enforcement measures under the CWA are essential for
aggressive  and efficient enforcement against polluters.  EPA and  Coast Guard
experience  with CWA administrative enforcement has demonstrated that there are
several areas where administrative enforcement mechanisms can be enhanced, and
has resulted in identification of several amendments that are essential to effective
implementation of the new enforcement  regime.


Administrative Penalty Cap

The $ 125,000 penalty limit on Class II administrative proceedings limits administrative
enforcement efficiency by requiring EPA, the U.S. Army Corps of Engineers (COE),
and the U.S. Coast Guard to refer cases assessing penalties in excess of this amount
to the Department  of  Justice (DOJ)  for filing  in  Federal district  court.   This
requirement precludes EPA, COE, and the Coast Guard from  using  less  resource
intensive administrative penalty authority in many instances where it would be useful,
appropriate, and less expensive, to both the agency and the violator.

Class II Penalties  for §311  Spilt Violations

Potent deterrence  against oil spills  and  hazardous substance discharge is  an
indispensable part of the Administration's enforcement strategy under the CWA. The
U.S. faces increasingly serious environmental threats from the predominance of
foreign flag tankers operating  in U.S. waters, as  well as the aging infrastructure of
transportation-related and non-transportation-related  pollution sources.  Eighty-five
percent of vessels entering U.S. ports are foreign flag. The Congress has highlighted
their interest in vigorous enforcement against substandard vessels, especially tankers.
Effective administrative enforcement against spill violations under §311 is critical to
hold foreign flag  ships to the same standard of accountability as domestic  facilities
regulated under §309.

The current  Class II administrative penalty authority is not an effective deterrent
against numerous  "medium-sized"  spill violations,  which clearly  warrant higher
penalties envisioned by the Class II option, but do not normally warrant the  resource
intensive judicial civil proceeding envisioned for the most grievous spill violations
("major spills").  The maximum penalty of $10,000 per violation per day for spill
violations is weak and unwieldy for the vast majority of "medium-sized" oil spills.
Because of the nature of most 311  spill violations,  the duration of the discharge
violation rarely exceeds one day, effectively capping the Class II maximum penalty at

                                   -  85 -

 the Class I level of $10,000 per violation.  The glaring defect in the Class II penalty
 authority is the absence of the volumetric spill sanction, "per barrel of oil or unit of
 RQ," currently provided only in the judicial civil penalty forum.  The omission of this
 scheme for administrative penalties hampers EPA and Coast Guard ability to apply the
 most  efficient  and effective enforcement tool  against these more serious  spill

 Class  I Penalties for §311  Spill Violations

 The current Class I penalty authority is a very  weak deterrent in comparison to
 comparable environmental and transportation safety statutes,  such as the Act to
 Prevent Pollution from Ships, the Marine Plastic Pollution Research and Control Act,
 and the Ports and Waterways Safety Act.  These statutes allow hearing officers to
 award administrative penalties of up to $25,000  per violation, with no cap on total
 assessments. In contrast, the Class I authority under the  CWA is limited to $10,000
 per violation, with total assessments not to exceed $25,000,  regardless of the
 number of violations. The CWA authority should be on par with these other statutes.

 Overfiling Authority

 The United  States  currently has authority to file its own judicial or administrative
 enforcement action even where a State is diligently pursing civil judicial  remedies
 against a violator.  However, the ability of the U.S. and citizens to "overfile" State
 administrative penalty actions is presently  restricted under §309(g)(6). The recent
 decision of North and South Rivers Watershed Association. Inc. v. Town of Scituate.
 No. 91-1255 (1st Cir.  1991) broadly interpreted this restriction  and barred a citizen
 enforcement action. EPA is concerned that this expansive interpretation of the bar to
 citizen enforcement actions will be applied equally to bar Federal enforcement actions,
 which  would hinder EPA's  State oversight  and enforcement responsibilities.

 Field Citations

 CWA enforcement responsibilities  have increased  markedly in recent years,  but
 enforcement resources have remained limited.  As a result, there has developed a
 need to target enforcement resources more efficiently  and to develop new and
 innovative approaches to enforcement. Current statutory authority requires EPA and
the COE [relative to §404] to provide public notice before any administrative penalty
action  may be brought, and therefore precludes  EPA and COE from implementing
innovative approaches such as those in the  1990 amendments to the CAA, in which
Congress enacted  a provision that authorized EPA  to  implement a "field  citation"
program to assess administrative penalties  for minor violations of the CAA without
prior notice to the  public.  This authority would allow EPA and COE to broaden the
scope of enforcement activities, address more violations, reallocate resources to more
significant cases, and establish a greater regulatory presence. Field citations should
                                   -  86 -

not be given any preclusive effect, but a court should consider them in assessing any
subsequent penalty.

Penalties for Violation of Administrative Orders

EPA, the Coast Guard, and the COE are not authorized to seek administrative penalties
for violation of an administrative order issued under §309 or §311. Enforcement of
an administrative compliance order requires EPA, the Coast Guard, and the COE to
seek civil judicial enforcement from a Federal district court. This procedure is slow,
cumbersome,  and  resource  intensive as compared to the administrative  penalty
process. The authority to assess administrative penalties for such violations would
allow EPA, the Coast Guard and the COE to bring and conclude cases for violations
of administrative  orders  more promptly,  obtain  higher  penalties,  and improve
compliance earlier and with fewer resources.  This procedure would fully comply with
the requirements of due process because the validity of the compliance order could
be challenged  in any penalty, as well as in any appeal proceeding in Federal court.

State Consultation Defenses

Before assessing a  Class I or Class II administrative penalty under §309 of the CWA,
EPA must "consult" with the State in which the violation occurred.  Under the present
procedure, parties  seeking review have  objected to the  degree of consultation
between EPA  and the State, and have  sought to discover from  EPA  additional
information  regarding that consultation.   The Administration believes that the
adequacy of State/EPA consultation should not be a basis for a party seeking review
to challenge the assessment of a penalty. Moreover, the Administration is concerned
that releasing documents related to this consultation may reveal enforcement sensitive

Requests for Information

Section 308 of the CWA authorizes  EPA to require the owner or operator of any
"point source" to install  monitoring equipment, sample effluents,  maintain records,
etc.  The CWA regulates many persons, such as IDs of a POTW who have at times
claimed that they are  not subject to  the provisions of §308  because they are not
themselves owners and operators of a "point source." This issue has also arisen with
respect to zero discharge facilities.  The Administrator should have clear authority to
request information from all persons regulated under the Act,  including industrial users
and zero discharge facilities.

Subpoena Authority

While EPA has authority to obtain information from owners and operators of point
sources, the power to compel oral responses to oral questions through the use of a
                                   -  87  -

subpoena is essential in  certain types of investigations.  The ability to compel
testimony  is  an extremely  effective means  to  discover information  from  an
uncooperative or adversarial  source.  Under current law, both EPA's ability under
§308 of the CWA to issue subpoenas, and the Coast Guard's ability under §311, is


The Administration recommends that the CWA be amended as follows:

Administrative Penalty Cap

>     Amend  §§309(g)(2) and 311 (b)(6)(B) to increase the administrative penalty
      caps from $125,000 for class II  penalties to $300,000, and from $25,000 for
      class I penalties to  $100,000.  The cap on class II penalties should also be
      subject to waiver upon agreement of EPA, the Army Corps of Engineers, or the
      Department of Transportation, as appropriate, and DOJ, similar to the waiver
      in Section 113(d) of the Clean Air Act.

Volumetric/ Enhanced Establish Administrative Penalties under  §311

>•     Amend §311(b){6) to provide potent administrative penalty sanctions against
      spills and other serious environmental violations by vessels and transportation
      related sources in U.S. waters.   Provide a volumetric administrative penalty
      sanction for class II  enforcement authority up to $2000 per barrel of oil or unit
      of reportable quantity of hazardous substance discharged, and for class I up to
      $1000 per barrel of oil  or unit of reportable quantity of hazardous substance
      discharged. Increase class II "per day per violation" penalty from $25,000 to
      $50,000 and  class  I "per violation" penalty from $10,000 to $25,000.  This
      change would put class I penalty authority on par with related statutes.

>•     There should  also  be  a separate clause in  §311(b)(6) providing for the
      assessment of a Class I $25,000 penalty per violation per day for violations of
      §311 (j) in place of the present $10,000 per violation penalty up to the amount
      of the administrative penalty cap.  Section  311(j)  violations involve spill
      prevention violations rather than a discharge  of oil or hazardous substance,
      making it incongruous to  provide an option of assessing  penalties per day of
      violation or per unit of substance discharged for §311(j)  violations.

Overfiling  Authority

>•     Amend  §309(g)(6)(A)  to delete the  provisions  by which certain  State
      administrative enforcement actions may bar a Federal judicial or administrative
      enforcement or citizen suit action.
                                   - 88  -

Field Citations

>     Amend §309 of the CWA to waive the public notice requirement for Class I
      administrative penalties,  of $25,000 or  less, giving EPA and the COE the
      discretion to develop, as appropriate, an effective field citation program for EPA
      and COE personnel. Where a field citation is issued against a Federal facility,
      a conference between the Administrator, or the Secretary of the Army, as
      appropriate, and the Secretary of the respondent Agency should  be provided
      prior to final penalty assessment.

Penalties for Failure to Notify

>•     Amend CWA §311{b)(6)  and (b)(7) to provide for administrative and judicial
      civil penalties for failure to notify the United  States of illegal discharges of oil
      or a hazardous substance. Currently, §311(b)(5) provides for criminal penalties

Penalties for Violation of Administrative Orders

>     Amend sections 309{g) and 311(b)(6) to provide EPA, the Coast Guard, and
      the COE  with authority to assess administrative penalties for violations of a
      previously issued  administrative order.

State Consultation Defenses

>     Amend  §309(g)  to  prevent a party seeking review  from challenging  an
      administrative  penalty on  the  ground  that State/EPA  consultation was

Requests for Information

>     Amend §308(b) to authorize EPA to obtain information and access from any
      person subject to regulation under  the CWA.

Subpoena Authority

>•     Amend §509 and §311(m)  to authorize  EPA and the Coast Guard to issue
      subpoenas to for  the purposes of enforcing the Act.
                                   -  89 -

 Recent court decisions have significantly diminished the deterrent threat posed by
 citizen  enforcement under the CWA.  These decisions have narrowly interpreted
 citizen  standing to sue by limiting the right to bring suit to instances of "ongoing"
 violations. At least one State has eliminated a citizen's right to challenge a State-
 issued  NPDES  permit.   Also, the purpose for U.S. review of proposed consent
 judgments in citizen suits needs clarification.


 Requirement of "ongoing" violations

 Section 505(a) of the CWA authorizes a citizen to commence a civil suit against a
 person  "who is alleged  to be in violation of" an effluent standard  or administrative
 order. Interpreting this language, the Supreme Court held that §505 does not permit
 citizen suits for wholly past violations in Gwaltney of Smithfield  v. Chesapeake Bay
 Foundation. 484 U.S. 49 (1987). The Supreme Court decision in Gwaltney has both
 weakened and complicated citizen enforcement under the  CWA.  The decision has
 also created complex questions related to penalty assessment. These types of issues
 are being  litigated repeatedly in the Federal courts.

 Congress  has previously acted to  assure the continued vitality  of  the citizen
 environmental enforcement effort.  In 1990, Congress amended the CAA citizen suit
 provision to enable citizens to commence an action against any person "who is alleged
 to have violated (if there is evidence that the alleged violation has been repeated) or
 to be in violation" of the CAA.  In amending the CWA, the Administration seeks to
 allow citizen suits for any past violation  or set of violations, while  at the same time
 recognizing the equities associated with the imposition of penalties for some wholly
 past violations.

 Citizen challenges to State-issued NPDES permits

 Pursuant to §402(a) of the CWA, EPA is authorized to issue NPDES permits regulating
discharges of pollutants by point  source dischargers.  Under §402(b), EPA may
authorize a State  to operate the permitting program within its borders.  When EPA
prepares to issue a permit, that process is initially determined by  EPA regulation, 40
C.F.R. Parts 122 and  124.   Under CWA  §509(b)(1) and  these regulations,  "any
interested person" is  entitled to  challenge EPA's  permitting decisions through  a
request for an administrative evidentiary hearing and if necessary an appeal of EPA's
decision to Federal court.
                                   - 90  -

Determinations about which parties have standing to challenge the issuance of a State
issued NPDES permit is a matter of State law. The "any interested person" language
of the CWA does not explicitly apply to State issuance of permits. Consequently, at
least one State has very narrowly construed who may challenge permit issuance such
that citizens are effectively excluded from the process.

EPA and DOJ Review of Proposed Consent Judgments

Most citizen enforcement suits  brought under the CWA  are resolved via a  consent
decree that is negotiated by the parties and  presented to the court for entry as an
enforceable order  of  the  court.   Under §505(c){3),  "[n]o [citizen suit]  consent
judgment shall be entered in an action in which the United States is not a party prior
to 45 days following  receipt of a copy of the proposed consent judgment by  the
Attorney General and  EPA." This provision provides no guidance to EPA or DOJ as
to what the government is supposed to do with the consent judgments during the 45-
day period. Adding language explaining the role of the government would be helpful
in assuring that the court understands the role of the United States in this process.


That Administration recommends  that the CWA be amended as follows:

Requirement  of "ongoing" violations

»•    Modify the  citizen suit provision of  the CWA to assure that citizens may
      maintain suit for all past  violations, occurring after the  effective  date of the
      amendment, that have occurred during the 5 year statute  of limitations period.
      Further, amend the penalty assessment criteria in CWA §309(d) to  require that
      a federal District Court consider, when assessing penalties against a person
      that is no longer in violation, the following factors (in addition to the existing
      factors): (1) the duration of the violator's continuous compliance and non-
      compliance, (2) the efforts of the violator to comply both  prior to and after the
      violations at issue, (3) the diligence of the violator  in preventing the violations
      at issue, and (4) the likelihood of recurrence of violations.

Citizen challenges  to State-issued NPDES permits

>-    Modify the CWA to assure  that "all interested parties" are provided the right
      and  opportunity to challenge in State  court any State-issued CWA permit.

EPA and DOJ Review of Proposed Consent Judgments

»>    Modify §505(c)(3) making  explicit that  the United States' role in reviewing
      proposed citizen suit consent judgments is to determine its consistency with
                                    -  91 -

      the purposes and requirements of the CWA and that the court is to consider the
      United States' views  in  deciding whether to enter a  proposed consent
      judgment.  The statute should provide that a court shall not approve any
      proposed  consent judgment that  is inappropriate, improper, inadequate, or
      inconsistent with the purposes and requirements of the Act. Also, instruct the
      court to consider  the penalty factors contained in  Section 309(d) of the Act
      in determining whether the agreed-upon penalty is sufficient to further the
      deterrence purposes of the Act.

Criteria  for Approval of Consent Decrees

»>     Amend Section 505 by adding a new subsection providing guidance to courts
      concerning the appropriate standard to apply in reviewing a proposed consent
      judgment in a citizen suit. The section should clarify that a court shall not
      approve any proposed consent judgment  that is inappropriate, improper,
      inadequate, or inconsistent with the purposes and requirement of the Act.
      Language should also be included instructing the court to consider the penalty
      factors contained in Section 309(d) of the Act as well as any views expressed
      by the United States in deciding whether to approve a consent decree.

Other Suggestions

>     Amend CWA §505(f) to assure that citizens  are authorized, as the federal
      government is authorized under §307(d), to sue for: (a) violations of  both
      pretreatment requirements and pretreatment standards (see infra discussion
      concerning CWA §307(d) and (b) violations  of §404 permits.

+     Currently, State administrative penalty actions under State laws comparable to
      Section 309(g), when diligently prosecuted, preclude citizen suits seeking
      penalties for the same violations. We are seeking to remove that bar so that
      citizens (and EPA) could overfile State administrative penalty actions.   We
      propose a more limited change to the analogous provision in Section 505 with
      respect to  State court enforcement actions. We suggest amending Section
      505(b)(1)(B) to  add the words "that  has a  permit program approved under
      Section 1342(b) of this title"  after "if the administrator or  State."   This
      amendment would ensure that citizen suits under the CWA would be barred
      only by civil enforcement actions by those States with EPA-approved permit
      programs.  This amendment would also ensure that a citizen suit would not be
      precluded by a State court action that lacks the  procedural protection, such as
      allowing public participation  in the proceeding, that is required  of State
      enforcement under EPA-approved  programs. See 40 C.F.R. 123.27(d).  Of
      course, under the language of Section 505(b), the State would also have to be
      "diligently prosecuting" its enforcement action  to bar a citizen suit.
                                  - 92  -

                     ENDANGERMENT PROVISION
The CWA, as interpreted by the courts, does not provide adequate authority to EPA
or the public to address water pollution that poses a threat to human health or the
environment. The imminent and substantial endangerment provision of the statute is
narrower in its application than the more modern provisions in other environmental


Imminent and Substantial Endanaerment

Section 504 of the CWA authorizes EPA to respond to emergencies where there is an
imminent and substantial danger to the public health or economic welfare. Emergency
provisions are also found in the Safe Drinking Water Act (SDWA), §1431, CAA,
§303,  RCRA, §7003, CERCLA §106, and §311(e) of the  CWA (regarding  oil and
hazardous substances). Each of the provisions is different. In several respects, §504
provides EPA with less authority than that provided by the emergency provisions of
any of these other statutes.

For example, under §504 of the CWA, EPA is not  authorized to issue administrative
orders, but must seek enforcement of the provision in Federal  court.  In contrast,
§1431 of the SDWA and  §30>3 of the CAA authorize EPA to issue "such orders as
may be necessary to protect the  health of  persons".  Section 7003 of  RCRA
authorizes EPA to issue "such orders as may be necessary to protect public health and
the environment."   Procedures for judicial enforcement of such orders are also
established in §1431 of the SDWA, §303 of the CAA, and  §7003 of RCRA. The
enforcement  options available under the SDWA,  RCRA, and  §311  go beyond
administrative orders and suits. Section 1431 of the SDWA authorizes EPA to "take
such actions as he may deem necessary" to protect the health of persons endangered
by public water system contaminants. §7003 of RCRA also authorizes EPA "to take
other action."

Section 504 of the CWA may only be invoked when there is endangerment to human
health or welfare. However, endangerment to welfare is restricted to endangerment
to "livelihood," such as  "the  inability to market  shellfish."  Section  504 does not
identify environmental protection  as a justification for invoking  EPA's  authority. In
contrast, the analogous section in the CERCLA, §106, authorizes a response when
there is endangerment to "public  health  or welfare or the environment". Similarly,
 §7003 of RCRA authorizes EPA to take action when there is endangerment to "health
or the environment".  CWA §311(e) can  be used when there is imminent and

                                  -  93  -

 substantial threat to the public health or welfare of the United States, including, but
 not limited to, fish, shellfish, wildlife, public and private property, shorelines, beaches,
 habitat, and all living and nonliving natural resources under the jurisdiction of the
 United States.

 Section 504 of the CWA provides that EPA's emergency powers are triggered only
 when a pollutant source "is presenting" an imminent and substantial endangerment
 In contrast, §1431 oftheSDWA, §7003 of RCRA and §106 of CERCLA and §311(e)
 of the CWA provide a  lesser threshold  that allows EPA to respond to threatened
 emergencies. It is not clear, as in §7003 of RCRA, that EPA may take actions where
 a past discharge may  present an  imminent  and  substantial  endangerment.
 Clarification of this  point is important because in  many instances it  is  the
 accumulation of  pollutants  in  sediments  from  past  discharges  that pose  the

 Amending §504 to incorporate elements of the other statutes' "emergency powers"
 provisions would provide several benefits.  First, it would ensure the same level of
 protection of public health and the environment under the CWA as provided under
 other environmental statutes in comparable emergency situations. Second, it would
 broaden EPA's enforcement  options.  In addition, conforming  §504 to the other
 statutes' provisions would reduce the administrative and judicial burden of interpreting
 and applying widely differing  statutory provisions in a crisis.

 Assuring Public Ability to Respond to Emergencies

 Under the emergency provision of the CWA, only EPA  has authority to initiate an
 action in response to a threat or endangerment to the public health or welfare.  No
 provision is made in §505 of the Act to grant citizens the right to bring a suit under
 these circumstances.  This authority is provided to citizens bringing suit under the
 citizen suit provision of RCRA  §7002(a)(1)(B).

 Because at present the public has no direct means to seek redress for water pollution
problems other than those caused by point source dischargers or dischargers to
POTWs, it is important that the public have authority  to enforce  CWA §504.


»     CWA §504 should be amended to:

      o     include elements of other Federal  environmental statutes' emergency
            powers provisions,  including a provision empowering  EPA to issue
            enforceable emergency orders;
                                  -  94 -

o     authorize EPA to initiate an emergency action in response to a threat
      posed to the environment;

o     clarify the law to allow EPA to invoke §504 when the discharge "may
      present" an  imminent and substantial endangerment to public health or
      the environment;

o     provide that the emergency powers provision applies to any person, not
      just those specified in § §504 and 311 (e);

o     provide for administrative and/or civil judicial penalties for violations of
      an emergency order, as well as appropriate injunctive relief.

o     provide that knowing violations of §504 emergency orders be subject to
      criminal sanctions,,

CWA §505 should be amended to allow citizens to  initiate actions to  abate
imminent threats to the public health, welfare, and the environment.  Citizens
acting to abate these threats should give notice, but should not be subject to
the CWA §505{b)(1)(A) sixty day waiting period.
                             - 95  -



Close coordination between EPA and the Coast Guard on development of new civil
and administrative penalty programs under Section 311 has resulted in identification
of several amendments that are essential to  effective implementation of the new
enforcement regime.


CWA §311(j)(1)(C) authorizes EPA to require facilities to  develop spill prevention,
control and countermeasure (SPCC) plans. There are several deficiencies, however,
in §311 's provisions for enforcing these requirements.  First, §311 does not expressly
authorize EPA to seek the  issuance of  injunctions from the courts to compel
compliance with the 311 (j) requirements.  Second, EPA and the Coast Guard are not
specifically authorized to issue administrative  compliance orders mandating §311(j)
compliance, unless they demonstrate that the facility's failure to do so presents an
imminent and substantial threat.  Third, there are no criminal sanctions for negligent
and knowing  violations of  §311(j) requirements,  except for situations where false
material  statements,  representations, or certifications  are  made.   See  CWA

Although information gathering authority is available to EPA under both sections 308
and 311 (m) of the CWA for spill violations, the §311 (m) authority is not enforceable
by sanctions.  This is a particular disadvantage to the Coast Guard, which cannot
employ  §308.


The Administration proposes that the CWA be amended as follows:

Improve §311(j) Enforcement Remedies

»•     Additional  enforcement authority  for violations of  CWA §311(j) should be
      added to CWA §§309(c) and 31 Kb). Specifically, these sections should (1)
      authorize EPA and the  Coast Guard to issue administrative compliance orders
      mandating  §311(j) compliance, (2)  authorize courts to  issue injunctions to
      compel compliance  with spill prevention  requirements, and (3) authorize
      criminal sanctions for negligent and knowing violations of § 311 (j) requirements.
                                  - 96  -

Make §311 Information Requests Enforceable

>     Section 311 (b)(6) should be amended to provide authority to impose both Class
      I  and Class II administrative civil penalties for a failure to  comply with an
      information request under §311 (m)(2).  §311 (b)(7) should be revised similarly
      to include authority to seek $25,000 per day penalties for violations of such an
      information request.


Clarify Jurisdiction Under Section 311

*     Clarify that the government has enforcement  authority against discharges
      occurring in the  U.S.  exclusive economic zone  with  the proviso that this
      jurisdiction will be exercised consistent with international law. Several steps
      may be necessary to accomplish this change. First,  a definition of "exclusive
      economic zone" consistent with other statutes should be added.  Second,
      "exclusive  economic zone" should be substituted for  the term  "contiguous
      zone" in section 311(b)(3)(ii) and (m)(1)(a), while specifically preserving Coast
      Guard authority under 14 U.S.C. §89(a). Third, a savings clause similar to that
      in the Act  to Prevent Pollution from Ships also should be added in order to
      avoid any international law conflicts.

>     Add a definition of the phrase "adjoining shoreline" to §311 (a) of the CWA to
      clarify that the term includes  all  land  areas upon  which oil or hazardous
      substances have been discharged if the spill is either into or threatens navigable
      waters. The meaning of adjoining shoreline has become much more significant
      with the 1990 OPA amendments that created a volumetric penalty scheme,
      since the most oil spilled is near, but not into, waters of the United States.

+     Amend CWA §311 (a)(6)(C) to include abandoned vessels and abandoned on-
      shore facilities  in the definition  of entities subject to §311 regulation.
      Currently,  only abandoned off-shore facilities are included in the definition,
      creating  a  loophole for former owners and operators of abandoned on-shore

>•     Provide for venue in any district in which a corporate defendant does business.
      Clarify that venue over a claim  related to failure to report a spill exists where
      the spill occurred.

*•     The definition of "United States" in §311 (a)(5) should be amended to conform
      to the definition of §1001(36)  of OPA, so that it includes within it the term
      "United States" as well as the various States and territories.
                                    -  97  -

                          CONTRACTOR LISTING
How  can the contractor listing program under CWA §508 be improved  through
changes in the statute?


CWA §508 provides that  any facility owned,  leased or supervised by a  person
convicted under the CWA is ineligible to receive Federal funding until the condition
which gave rise to the conviction is corrected.

The provision correctly recognizes that economic factors play a major role in both
motivating and reforming human conduct. The purpose of this provision is to prevent
the government from contracting  with environmental criminals. This provision was
intended to remove any and all economic incentive to violate the statute.  However,
under the current provision, companies are able to avoid listing and retain economic
benefits by transferring an about-to-be convicted supervisor who committed criminal
acts.   In  addition,  some companies violate the CWA  at marginally profitable  or
unprofitable sites and then abandon those sites and move business operations to other
locations  after obtaining the competitive benefits  of noncompliance.   Also, the
regulated  community is not required to assume affirmative responsibility related  to
certifying  eligibility for Federal contracting.

Clarification of the CWA's provisions with respect to  Federal procurement and
contractor listing  would result in greater efficiency for contractor listing and less
likelihood  of Federal money being spent to support environmental offenders. CWA
§508 should be retained in its present form, authorizing the President to exempt any
contract,  loan, or grant where  he determines such  exemption is necessary in the
paramount interest of the United States.


>     CWA §508  should  be amended to provide  mandatory listing for criminal
      violations of the Rivers and Harbors Act of 1899, 33 U.S.C. § §403 and 407,
      as well as the CWA.

>     In addition, the statute should clarify the broad discretionary authorities of EPA.
      The statute should authorize EPA to:  define the scope of the program; provide
      for listing of a convicted person acting as a supervisor; provide that actions  of
      such supervisors are  a  proper basis for mandatory listing of the facility that
      employs that person;  and, allow EPA to consider the supervisory status of the
                                   -  98  -

person at the time of violation, not conviction, as an appropriate determining
factor for listing consequences of a criminal conviction.

The statute should authorize EPA to use its discretion to define the extent of
the contracting prohibition with respect to activities, ownership, or operations
by the convicted person. Thus, EPA could define "facility" within the context
of each conviction and bring to justice those companies that fail to comply and
then move their business.  Such discretionary authority  for EPA would  be
consistent with CAA §306(a) that provides EPA with authority to extend the
prohibition  against contracting and Federal  procurement use of a facility to
other facilities owned or operated by a convicted person.

The Administrator should also be permitted to remove a facility from its list of
violating facilities whenever the Agency is satisfied that the conditions which
gave rise to the civil or criminal violations have been corrected.  A mandatory
listing of a particular period of time could constitute a serious disincentive to
voluntary reporting and prompt correction of CWA violations.

The statute should require companies that  have been convicted, or whose
owner, operator, or supervisor has been convicted of violating  §309(c) of the
CWA or the Rivers and Harbors Act, 33 U.S.C. § §403 and 407,  to disclose the
fact  of  that conviction when making certifications  of eligibility for Federal
grants, loans and contracts. Current certifications ask if a facility to be used
for the grant or contract purpose is "on the EPA... List," which is a reference
to the procedure which has been established by EPA under subsection (b) and
is a legal conclusion.  Companies may be unaware or may assert that they were
unaware of their status with respect to the published list, despite the automatic
statutory ineligibility contained in CWA §508(a).  Every company, however,
should at least know  if it, or an owner, operator or supervisor, has  been
convicted of criminal violations of the CWA or other statutes, since the fact of
Federal  criminal convictions are usually noteworthy events in any existence,
corporate or personal.
                              -  99  -

Should there be an explicit statutory  authority for courts to approve a consent
judgment or settlement requiring that a portion of a civil or administrative penalty
agreed upon by the parties be used by the violator to pay for an environmentally
beneficial project?


An innovative way to enhance environmental protection and fund beneficial projects
would be to authorize  courts, in appropriate circumstances, to approve a consent
judgment or settlement under which  civil violators  would  agree to  beneficial
environmental projects in the area  where the violations occurred.  Courts however
would not have discretion in civil cases to order such projects  absent agreement of
the parties.  Current EPA policy permits the Agency, in the course of settlement
negotiations with a civil defendant or respondent, to reduce the amount of cash in the
total  penalty assessed where the violator agrees to  complete a "supplemental
environmental project"  (SEP) to ensure that, for example, environmental restoration,
pollution prevention, or public education and awareness programs in the violator's
locality are funded and supported.  The SEP must have a nexus, broadly defined, to
the violations committed by the defendant. In addition, EPA SEP policy requires that
a violator pay a substantial monetary penalty.  In no case would a reduction of the
cash penalty of more than one dollar penalty for one dollar SEP be acceptable.

Courts, however, would not  have  discretion in civil cases to order such projects
absent agreement of the parties. This is not an appropriate role for the courts. Courts
are competent only to adjudicate disputes. Unlike the EPA, courts have no particular
expertise  in environmental  restoration or pollution prevention.  They are not, and
should not become, funding  organs, dispensing largess among competing social,
moral, and political interests—a quintessentially legislative function.  Moreover, it
would unduly complicate enforcement actions if the parties had to brief the court with
respect to the possible  uses of the  penalties for environmentally beneficial projects.
Furthermore, in some cases, it could appear inappropriate for a court to order one
party to make a payment to private  individuals not involved in the lawsuit even if for
an environmentally  beneficial  project.  Competition among claimants as to judicial
largess could expose courts to conflict  of interest charges and cast doubt on their

When parties agree to  an  environmentally  beneficial project  in the context of a
consent judgment in a civil suit, these concerns are substantially  reduced, and are
outweighed by the benefits to be gained from such a project.
                                  - 100 -

SEPs must improve the injured environment or reduce the total risk burden posed to
public  health  or the  environment  by the  violations  at  issue,  and  under no
circumstances could agreement to a SEP provide the violator with additional time to
correct the violation and return to compliance. The project should not be an activity
which is otherwise required by law. Providing courts with authority to approve SEPs
in lieu of a portion of the total cash penalty assessed in the above contexts could lead
to  significant environmental improvement in the areas where violations occurred,
without the expenditure of scarce Federal resources.

In a criminal case it is generally inappropriate to allow a defendant to enjoy a reduced
criminal fine by agreeing to pay a  portion of that fine for an environmental project.
The payment of criminal fines carries the stigma of criminal conviction, and this
stigma should not be lessened by the public perception of environmental munificence
that may attach to the funding of an environmental project.


*     The CWA should be  amended  to clarify that,  notwithstanding contrary
      provisions of law, in addition to the payment of  a cash penalty that recovers
      at  minimum the  economic benefit of the violation,  a Federal court  may
      authorize-as part of a consent decree or settlement in an  EPA civil judicial
      action  or citizen suit-that  the  violator complete  a SEP to improve  the
      environment or public  health. (Recovery of economic  benefit in  cash  as a
      prerequisite to allowance of a SEP would not apply in cases against POTW or
      Federal facilities.)
                                   -  101  -

                        ENVIRONMENTAL AUDITS
 Environmental audits could be an effective process by which regulated facilities would
 identify  systemic  obstacles to compliance as  well as opportunities for pollution
 prevention. Mandatory environmental auditing is somewhat controversial due to the
 cost  implications  of  facility-wide audits performed in accordance  with Federal
 guidelines and regulations. However, clarifying EPA's authority to require an audit
 upon a finding that a person is in violation of the Act could serve as a strong deterrent
 against future  violations  by  the facility and could help ensure that appropriate
 measures were taken to address the violations at issue.  Should EPA's authority to
 require environmental audits be clarified under the CWA?


 In 1986, EPA issued an Environmental Auditing Policy Statement in which the Agency
 acknowledged the value of environmental auditing "... by regulated entities to help
 achieve and maintain compliance with environmental laws and regulations, as well as
 to help identify and correct unregulated environmental hazards."  This document also
 suggested the use of environmental audits in the enforcement context. Also in 1986,
 EPA  issued guidance on the inclusion  of  environmental  auditing provisions  in
 enforcement settlements.  EPA has continued to consider the appropriate use  of
 environmental auditing for enforcement purposes. The possible uses of these audits
 are many, but in the enforcement context the Agency has identified two uses that
 would prove extremely valuable.   First, environmental  audits may  be used  to
 determine the causes of CWA non-compliance; and, second, the parties may negotiate
 environmental audits  of the defendants'  facility as  a term of settlement. Audits
 conducted in the context of such settlement determine the causes of the past non-
 compliance and assure that the means are identified  and implemented.

 Compliance audits could be required whenever the level of non-compliance at a facility
 is so severe that it indicates that the regulatee is unable or unwilling to take the steps
 to comply with the Act. These audits would assist the United States in any related
 enforcement action by providing information about the causes of and the solutions to
 the violations, information that the United States needs in order to properly resolve
 an enforcement action.

 EPA has also examined the potential for  auditing to be used a  tool for identifying
 opportunities for pollution prevention.  In this context the audit would be used to
identify  opportunities  for pollution prevention  within  production  and treatment
processes and  operation  and maintenance practices  at the  facility.    Pollution
prevention opportunities identified in the audit could also be given due consideration
by the regulator during any re-issuance of permits. All information submitted pursuant

                                  - 102  -

to any audit could be available for public review unless EPA determined it to be
confidential business information or otherwise inappropriate for public distribution.


>     CWA §§309(a) and 311 should be amended to expressly clarify that, upon a
      finding that a person is in violation of the Act, EPA or the Coast Guard may
      order a  person to conduct  and provide EPA  or  the  Coast Guard with an
      environmental audit. A court will continue to have authority to order an audit
      in criminal and judicial cases where such relief is appropriate.
                                   -  103  -

 There are numerous miscellaneous issues and some technical drafting problems with
 the CWA as currently enacted. A discussion of these issues follows.


 It is presently unclear whether a  discharge to  the ground or to ground water that
 rapidly moves into surface water through a "direct hydrological connection" between
 the point of discharge and the surface water is subject to NPDES regulation.  On
 occasion, EPA  has asserted NPDES jurisdiction over such discharges.  Case law,
 however, is divided on whether the CWA permits such jurisdiction.  Compare, e.g..
 M.E.S.S. v. Weinberger. 707 F. Supp. at 1196 with Kellev v. United States. 618 F.
 Supp. 1103 (W.D. Mich 1985). The ability to regulate discharges from identifiable
 point sources, such as infiltration basins located close to waterbodies, that will rapidly
 end up in surface waters through a direct hydrological connection is important if EPA
 is to protect water quality.

 The 9th Circuit  Court of Appeals held in Northwest Environmental Advocates v. City
 of Portland. (Civ. No. 92-35044, December 10, 1993), that a citizen could not bring
 suit under §505 for violation of a  narrative NPDES permit condition providing that,
 notwithstanding any other limits  in the permit, the  discharge could not cause a
 violation of State water quality standards in affected receiving waters. The  court
 reasoned  that citizens  can only bring suit under  §505 for  violations  of "effluent
 limitations" in NPDES permits and held that a narrative receiving water limit is not an
 "effluent limitation and is therefore unenforceable." The court held that only end-of-
 pipe limits are "effluent limitations."

 EPA is very concerned about the holding in Northwest Advocates being extended to
 Federal  enforcement under  §309, which is similarly worded to §505.   In  some
 circumstances EPA depends on non-numeric or narrative receiving water limitations
to ensure protection  of water quality when drafting  numeric end-of-pipe limits  is
 difficult or impossible. The Administration acknowledges the  need for specificity  in
 narrative limitations adequate to inform the permittee of the level of performance that
constitutes compliance.

States' programs are not now statutorily required to develop or implement a policy of
requiring State-imposed penalties to recoup the economic benefit of noncompliance.
States should abide by the same penalty standard applicable to the  United States  in
its CWA enforcement actions.
                                  - 104  -


The CWA should be amended to:

*     Confirm and clarify that a point source discharge to ground or to ground water
      that has a direct hydrological  connection  with  surface waters is subject to
      regulation as a NPDES  point  source discharge if  there is 1) a reasonably
      foreseeable direct hydrologic connection to surface  waters in the proximity of
      the release, 2) a greater than de minimus quantity of the pollutant must
      reasonably be able to reach the surface water, and 3) no other Federal statute
      directly addresses the activity causing the release.

+     Confirm and clarify that narrative and numeric end-of-pipe limits and receiving
      water limitations, both narrative and numeric, incorporated into NPDES permits
      are enforceable.

>     Authorize EPA to withhold water pollution control assistance under §106 from
      those  States  that lack  adequate authority  to abate  violations or fail to
      implement that authority, including that each State develop and implement a
      policy  that would  seek  to recoup economic benefit (if  any) in any penalty
      imposed by a State court or State administrative agency from all violators other
      than publicly-owned treatment works or federally-owned treatment works.


>     CWA §505  should be amended to specify that citizens alleging unpermitted
      discharge and similar violations may amend their complaints to allege additional
      violations without having to issue a new 60-day citizen suit notice, as long as
      the citizens did not know of the additional violations at the time the complaint
      was filed, and the new violations are closely related to the violations stated in
      the notice.

>•     Clarify that under CWA §309(g)(8) persons seeking to bring a judicial challenge
      to a class I administrative penalty order must  file  a complaint as well as a
      notice of appeal.  Further amend §309(g)(8) to clarify that the court, on an
      appeal  of  an assessment  of an administrative penalty,  be restricted to
      remanding the penalty to EPA or Secretary on a finding of abuse of discretion,
      and restricting the court from imposing additional penalties on its own initiative.

>     Amend CWA  §502(6) to indicate that specific itemization of pollutants is
      illustrative only and not meant to be an exhaustive, exclusive listing of what
      constitute pollutants. Also, "fill material" and "dirt" should be added to the
      illustrative list. "Manufactured items or products" should be added to the list
                                   - 105  -

 to  illustrate  that discarded consumer products, such as  refrigerators,  are

 Amend CWA §509 to  clarify the fora for judicial review  of EPA and COE
 actions, and to bring the section into line with other environmental statutes
 administered by EPA that provide for review of most final Agency actions in the
 United States courts of Appeals.  Section 509 should be amended to add  the
 following classes of actions to the list of actions that are  reviewable in  the
 United States Courts of Appeals:  all regulations promulgated pursuant to  the
 Act, approvals of State  water quality standards, approval or establishment of
 total  maximum  daily   loads  under  Section  303(d),  and final  permit
 determinations under Section 404 [including EPA actions under section 404(c)].
 Because Section 509 will encompass review of COE actions under Section 404,
 the provision should be amended to indicate that actions taken by the Secretary
 of the Army  are subject to the provision's review procedures.

 Additionally,  Section 509 should be amended to  provide that all actions
 reviewable in the United States Courts of Appeals that are of  nationwide scope
 and effect should be reviewable only in the Court of Appeals for the District of
 Columbia Circuit, and actions of less than nationwide scope and effect are to
 be reviewed in the Court of Appeals in the federal district in which any of the
 waters affected by the  Agency action are found. In order to  avoid  litigation
 over  whether an Agency  action  is  of  national scope  and effect, Section
 509(b)(1) should contain a provision similar to that in Section 307(b)(1) of the
 Clean Air Act stating that if the Agency action is based on a determination of
 nationwide scope or effect, and if in taking the action the Administrator finds
 and publishes that the action is based on such a determination, review of the
 action must be in the District of Columbia Circuit.

 Amend  §509, parallel to §307(d){7)(B) of the  Clean Air Act, to provide that
 only an  objection to a rulemaking action of the Administrator that was raised
 with reasonable specificity during the comment period may be raised for judicial
 review;  that if it was impractical to raise such an objection  during the  public
 comment period or if the grounds for such an objection arose after the close of
 the public comment period and the objection  is of central  relevance to the
 outcome of the rulemaking action, the Administrator shall convene a proceeding
 for  reconsideration of the rulemaking action and provide the same procedural
 rights as would have been afforded had the information been available  at the
time the action was  proposed; and that if the Administrator refuses to convene
such a proceeding,  the  person raising the objection  may seek review of her
 refusal in the U.S. Court of Appeals.  Reconsideration by the Administrator
would not  postpone  effectiveness  of  the  rulemaking  action,   but  the
effectiveness of the action amy be stayed by the Administrator or a court  for
a period not to exceed three months.
                             -  106  -

Amend  §509, parallel to  §307(d)(8) of the Clean Air Act, to provide that the
sole forum for challenging procedural determinations made by the Administrator
shall be in the appropriate U.S. Court of Appeals at the time of substantive
review of the action; that no interlocutory  appeals shall  be permitted  with
respect to such procedural determinations; and, that the Court may invalidate
an action on the ground of alleged procedural errors only if the errors were so
serious and related to matters of such central relevance to the action that there
is a substantial likelihood that the action would have been significantly changed
if such errors had not been made.

Amend  §309{g)(2)(A) and (B) to make uniform the event and time period by
which penalties are assessed by requiring penalties to be assessed "per day for
each violation."

Amend §309(c), (d), and  (g)  to delete provisions related to  "single operational
upset" because  they  are confusing  and needlessly complicate enforcement

Provide in CWA §313 that the United States,  its agencies and officers have the
right to remove actions brought in State court to Federal court.

Provide that  Federal agencies subject to administrative enforcement actions
may be represented by counsel admitted to any bar of a Federal court or of the
highest court of any State or Territory.

Amend CWA §402 to  require that a violator, upon a finding of liability, provide
notice to the public that it has been found in violation of the  CWA. Such notice
might be provided through publication in a local newspaper.

Amend CWA §505(a) (2) to permit citizens to bring action against the Secretary
of the Army for failures to perform nondiscretionary duties.

Amend section 312 to prohibit expressly the discharge of sewage from any
vessel subject to the standards and regulations of that section unless the vessel
is equipped with an operable marine sanitation device, and such device is  used
in  compliance with the Act.  EPA and the Coast Guard should be empowered
to enact regulations for assuring compliance with this requirement, such as
regular certification of the installation and proper use of the device.  EPA and
the Coast Guard should also  be jointly empowered to enforce this requirement.
Violations of this prohibition should be subject to administrative, civil judicial
and criminal penalties under section  309, as well as injunctive relief.

Section 309 should be amended to clarify that the Shipowner's Limitation of
Liability Act, 46 U.S.  C. 103 et seq., does not limit liability for civil penalties
                             - 107 -

and injunctive relief. Section 311 should be amended similarly to clarify that
the Shipowner's Limitation of Liability Act does not limit liability for the costs
of removal of oil or a hazardous substance or for restoration or replacement of
natural  resources.  The  United States  has been forced to litigate whether
defendants' liability under the Act is limited by the Shipowner's Limitation of
Liability Act, and a clarifying amendment of Section 309 would avoid onerous
litigation over this issue.
                            -  108  -

                    CHAPTER 6--PERMITTING

                          PERMITTING IN BRIEF

The National Pollutant Discharge Elimination System (NPDES) Program is one of the
centerpieces of the CWA's water pollution programs. Under NPDES, "point source"
discharges  of  pollutants into  waters of the  United States are prohibited unless
authorized through a permit.  NPDES permits contain technology-based and water
quality-based pollutant limits as well as monitoring and reporting provisions, and are
the fundamental mechanism for enforcing effluent limitations and  water  quality
standards of the Act.  The NPDES program through permits  currently regulates
hundreds of thousands of dischargers.  The  NPDES program is enhanced by the
pretreatment program,  which regulates  industries that  discharge pollutants into
municipal sewerage systems, and the sewage sludge program, which regulates the
use or disposal of sewage sludge.

Although one of the oldest programs implementing the CWA, the NPDES program
continues to evolve to reflect  experience with implementation and advances in the
policy and science  of water pollution control.  Accordingly, EPA's permit program
recommendations in the context of CWA reauthorization balance the need to maintain
and improve traditional programs (e.g.,  pretreatment), meet the demands of new
program development (e.g., storm water, CSO), and accommodate new paradigms for
control of toxic pollutants (pollution prevention, innovative technology).

Pollution  prevention  and technology innovation.  In the  last decade,  pollution
prevention has received increased attention.  Although the CWA has not yet explicitly
endorsed  pollution  prevention  or  innovative technology  approaches  (with  the
exception of an innovative technology waiver provision which was not widely used),
it does create sufficient flexibility to explore such approaches.  The Administration
recommends amendments to the CWA that include pollution prevention planning (and
best management  practices!   where appropriate)  as  enforceable NPDES  and
pretreatment program components, and  supports incentives to  promote innovative

Storm Water.  Under section 402(p) of the 1987 Amendments, EPA has established
a two-phased program to address the discharge of contaminated storm water.  This
has increased dramatically the size and scope of  NPDES coverage.

Under Phase I, EPA has established storm water permitting requirements for industrial
activities and for municipal separate storm sewer systems serving over 100,000
people.  Phase II applies to facilities and systems not covered under Phase  I; Phase
II sources are required to obtain a permit by October 1, 1994. Phase II may cover ten
times as many  facilities as Phase I. Based on EPA's experience with Phase I, and on
the likely broader scope of Phase II, the Administration recommends amendments to

                                  - 109 -

the CWA that would provide a more gradual shift to water quality-based municipal
storm-water permitting, exempt facilities with no storm water exposure from storm
water program requirements, extend Phase II deadlines, and control remaining non-
municipal sources through municipal storm water management programs.

Combined sewer overflows (CSOs).  Nationwide, about 1,100 communities have
combined sewer systems that discharge raw sewage,  industrial wastes, and storm
water from nearly 15,000 CSOs.  EPA's 1993 draft CSO Policy, developed through
negotiations with State,  environmental, and municipal representatives, contains
significant new permitting and enforcement provisions that will foster development
of NPDES permit  requirements, elimination of dry-weather overflows, and  timely

Pretreatment.  Under the authority  of  EPA or  State-approved local pretreatment
programs, some 1,500 POTWs now regulate over 30,000 significant industrial users
and hundreds  of thousands of other non-domestic dischargers through  permits or
other individual control  mechanisms.   Effluent and  sewage sludge quality have
improved markedly as a result.

The  Administration  is  recommending minor  revisions to  CWA pretreatment
requirements to improve control over non-domestic discharges to sanitary sewers.
Removal credits should only be allowed for pollutants that actually biodegrade in
POTW treatment systems rather than those that transfer to sludge or the atmosphere.
Additionally, the Administration supports minor modifications to the Domestic Sewage
Exclusion (DSE) and requests statutory authority for EPA to directly regulate industrial
                                 -  110 -

How should CWA be amended to incorporate pollution prevention requirements that
would facilitate reduction in pollutant loadings from industrial facilities?


Pollution prevention is a high priority of EPA.  However, it has been difficult to
uniformly promote pollution prevention in existing programs where authority to require
pollution prevention is not expressly authorized.

There are, however, examples of pollution prevention activities already underway in
the NPDES program. Twenty States have passed facility planning legislation. These
laws typically require certain types of facilities to assess their production processes,
identify opportunities for source reduction  or toxic use reduction, set quantifiable
goals, and  establish a plan for meeting these goals.  In addition,  many POTWS are
beginning to require source identification and pollution prevention assessment studies.
BMPsto promote pollution prevention are also used in NPDES permits, including EPA's
storm water general permits for industrial activities. Further, the  recently-proposed
Water Quality Guidance for the Great Lakes System includes a program requirement
that requires, as a condition in permits,  the permittee to develop and conduct a
pollutant minimization  program when a  water quality-based effluent limitation
(WQBEL) for a pollutant is determined to be less than the level of detection.

The Administration believes that the CWA should be amended to further incorporate
pollution prevention in the NPDES program.  Authorizing EPA to require facilities to
conduct  pollution   prevention  opportunity  assessments,  often called  pollution
prevention  plans, would allow EPA to require certain facilities to identify and evaluate
cost-effective opportunities to reduce pollution at the source of its generation on a
whole-facility, multi-media basis. This authority would be particularly useful when the
Agency issues water quality-based effluent limitations that are below the level of
detection for the specific parameter, when water quality standards are not being met
in the receiving water, and when a facility's  choice of treatment results in media-
transfer of pollution instead of treatment. This authority would provide permit writers
access  to  information  on  potential  source reduction techniques  to  determine
appropriate permit requirements. Pollution prevention assessments could be used also
to help them identify a cost-effective pollution reduction strategy to meet technology-
based or water quality-based limitations.

In addition, the CWA could be amended to promote pollution prevention by clarifying
EPA's authority to  require  BMPs for point sources in NPDES permits.  Although EPA
                                   -  ill  -

interprets §301 to authorize the imposition of point source BMPs whenever necessary
to achieve statutory controls, others have argued that §304(e) limits such authority.


The Administration recommends that the CWA be amended as follows:

>•     Provide permitting authorities the discretionary authority to require pollution
      planning as a NPDES permit and industrial user (IU) condition.  Facilities may
      be required by permitting authorities to submit a multi-media pollution preven-
      tion evaluation as a condition of  NPDES permits or  permit applications, or
      pretreatment standards.  In exercising this discretionary authority, permitting
      authorities would consider the need for the information, the  burden  of
      developing and implementing a plan,  and the environmental and public health
      risk of the pollutants being addressed.  For example, plans could evaluate the
      effluent mitigation performance of a  facility  when the effluent  limitations are
      below the level of detection. Existing facility pollution prevention programs and
      relevant evaluations  will be considered in fulfilling such requirements.  Before
      requiring implementation of any pollution prevention activity, the authority
      should evaluate the relative cost-effectiveness of alternative pollution control

»•     Clarify NPDES permit authority to impose BMPs for  point sources through
      NPDES permits to ensure compliance with the goals of the CWA.   Such
      authority should not  be limited  by the provisions in  §304(e). In  addition, such
      authority should also specifically address discharges from process lines and
      operating practices, such as facility maintenance and cleaning. Such authority
      is not intended to include BMPs for nonpoint sources.
                                   -  112  -

Should the CWA be amended to provide specific incentives to private industrial
development and research of new, innovative technologies?


A.    Industrial Technology Development

The structure of the NPDES program has been cited as constricting experimentation
on new, innovative technologies. Permit effluent limitations are generally based on
the known performance of tried technologies. Though not restricted by the NPDES
program, industry has argued that process and  treatment changes to save money,
time,  or energy, or to reduce pollutant discharge are not encouraged under the
existing program.

Implementation of pollution prevention or energy-saving measures at specific facilities
often  involves extensive technological adaptation or use of techniques or materials
previously untried in similar applications. Facilities undertaking process changes or
innovative treatment technologies may be uncertain of the environmental outcomes
those modifications will produce.  Despite current Agency enforcement policy which
does already allow for reduced penalties for expenditures for a failed technology that
could reasonably have been expected to work, fear of CWA noncompliance during
and after experimentation may hinder efforts to innovate if projected savings are not

Environmental statutes have provided for innovative technology incentives; however,
these have not fostered widespread development of innovative approaches by the
regulated community.  Section 3005(g) of RCRA provides for research, development
and demonstration (RD&D) permits for hazardous waste treatment technologies. This
program has not been widely used, in part, because RD&D permits had  low priority
in EPA regional offices and, in part, because of continuing liability. Section 301 (k) of
CWA allows for a permit compliance schedule; this waiver provision has been under-
used by industry in part because the provision expired shortly after the statutory date
for compliance with pretreatment standards and in part because the waiver provision
was too  unstructured to provide comfort for the industry, EPA, or environmental
groups.  CWA  §307(e)  also provides a similar  extension  for  ILJs  which  is still
applicable for new or revised categorical standards.

Many facilities are capable of testing new technologies without major  impacts on
effluent quality by using pilot-scale  facilities, bringing on-line temporary treatment
units  to "pre-treat" effluents from experimental production lines, or by adjusting
                                  - 113  -

 existing treatment facility operating parameters such as detention time, aeration, or
 pH.  Effluent quality may be impacted for brief periods while adjustments are made.

 B.    Marine Pollution Prevention & Control Technology Development

 Because incidental discharges from vessels engaged in transportation, by regulation,
 are not required to be permitted under NPDES, relatively little regulatory attention has
 been paid to non-sewage discharges from vessels. With few exceptions, there are no
 national  technology-based  standards  for  non-sewage  discharges  from vessels;
 therefore, uncertainty exists regarding effluent requirements for these discharges,
 impeding long-term research and development of vessel pollution control technology
 and the free movement of Department of Defense (DOD) vessels.  DOD is prepared
 to partner with EPA and affected States to develop uniform national standards for
 incidental discharges from DOD ships.  Environmental (e.g., protection of sensitive
 areas), technological, operational, and cost criteria, as well as international standards,
 would be considered in developing the standards. To ensure the stability  necessary
 for long-term research, development, procurement and  installation, the uniform
 national standards would govern vessel discharges, but the of States to establish no-
 discharge zones, under appropriate  circumstances,  would be preserved.   The
 standards would result in the development of advanced, dual-use technology which
 could then  be made available to other vessels or  applications. The Secretary of
Transportation may designate Department of Transportation vessels equivalent to
 DOD vessels to be subject to such uniform national standards.


A.    Industrial Technology  Development

The Agency should  be authorized to grant short-term schedules to  allow temporary
waivers from technology-based  limits  (not to exceed water quality-based limits) to
encourage experimentation with process changes to reduce source contributions of
pollution, reduce wastewater flow, or reduce energy-consumption.  This would also
protect facilities from the threat of citizen suits as long as they comply with the terms
of the schedule and interim limitations.

Specifically, the CWA should allow the Agency to:

 >•     Grant temporary waivers from applicable technology-based limitations (BPT,
      BAT, BCT, NSPS, PSES, PSNS)  (not to exceed three years from the date for
      compliance with such effluent limitation which would otherwise be applicable)
      to industrial facilities in exchange for environmental enhancement at  the end of
      the waiver period in  the  form of satisfying predefined minimum effluent
      reductions  that are more stringent  than  the applicable technology-based
      limitations or, alternatively, meeting the applicable technology-based limitations
                                  -  114 -

      in conjunction with enforceable conditions for satisfying a predefined minimum
      reduction of total emissions to all other media, a predefined minimum reduction
      in energy consumption, or an overall decrease in the cost of treatment.

>•     Require industrial facilities granted a short-term waiver meet the more stringent
      of water quality-based effluent limitations (local limits in the case of industrial
      users of POTWs)  or previously  effective BAT (PSES in the case of industrial
      users of POTWs),  whichever is more stringent, during the period of the waiver.

B.    Marine Pollution Prevention & Control Technology Development

Amend CWA Section  312 to:

*•     Mandate review of non-sewage discharges incidental to the normal operation
      of DOD vessels and other vessels designated by the Secretary of Transportation
      as equivalent to  DOD vessels.    Determine whether  regulation  of  such
      discharges  through the application  of technology is appropriate,  and if so,
      establish and periodically review uniform national standards.

*     Involve  the States,  federal agencies and  other interested  parties in the
      development  of standards, which  would be enforceable by federal and State

>     Upon the effective date of such regulations, preclude development of vessel
      discharge standards inconsistent  with the national standards.  Preserve the
      right  of  States   to   establish  no-discharge  zones,  under appropriate
      circumstances,  such as to protect environmentally sensitive areas.
                                  -  115  -

                       STORM WATER PROGRAMS
How should CWA storm water requirements be revised to strengthen and facilitate
irrtplementation of storm water controls?


States report  that approximately 30 percent  of remaining surface water quality
impairment is attributable to storm water discharges.  Significant sources of storm
water discharges include urban runoff, industrial activity, construction, and resource
extraction (mining). For example, in urban areas, loadings from storm water runoff
for heavy metals,  sediment, bacteria,  polycyclic aromatic hydrocarbons (PAHs),
acidity, and floatables are higher than those from POTWs.

To address these environmental risks, Congress established in 1987 a two-phased
storm water program under CWA §402(p). Phase I applies to municipal storm sewer
systems  serving a population over 100,000,  as well as storm  water discharges
associated  with industrial activity.

In November of 1990, EPA issued regulations that identified 220 municipalities whose
separate  storm sewer systems are subject to Phase I of the NPDES program. States
and EPA have  designated an additional 550 municipalities as part of the Phase I
program. The  Agency estimates that the Phase I municipalities have a population of
over 90 million people (about 36 percent of the total U.S. population).   EPA and
authorized States have received comprehensive permit applications from many of the
municipalities,  and are in the process of  developing and issuing  permits for these

In addition, the Phase I regulations established regulation of over 100,000 industrial
facilities in eleven categories, including manufacturing, mining, waste management,
construction, and transportation.  Permits for storm water discharges from Phase I
industries generally were required to be issued by October 1, 1993. The Ninth Circuit
struck down EPA's exemption from Phase I regulations of construction sites under 5
acres and light industrial activities "with no exposure" to rain water.

Phase II applies to all remaining light industrial, commercial,  retail, and residential
facilities with storm water discharges that are not in Phase  I.  Preliminary estimates
indicate that millions of facilities are not addressed by Phase I. Phase II is potentially
ten times larger in scope  than  Phase I,  and could  address a  large number  of
municipalities  without significant urban populations.  EPA was  required to  issue
Phase II regulations by October 1, 1993, which would designate classes of Phase II
storm water discharges to be regulated to protect water quality. Phase II sources are
                                  -  116 -

required to obtain a permit by October 1, 1994. EPA did not meet the October 1993
deadline for  Phase II regulations.

Municipal  Compliance with Standards

Municipal separate storm sewer systems (or "MS4"-those municipal systems that are
covered by the storm water program) have stated that it is both technologically and
financially impossible to establish treatment or management practices that can ensure
that urban storm water runoff complies with water quality standards.  They  have
indicated that it  is highly uncertain whether feasible storm water control measures
(source controls, traditional structural controls, and best management practices) will
ensure that storm water discharges will meet water quality standards. They further
argue that the only other alternative, collecting and treating essentially all of the storm
water from widespread urbanized areas, would be infeasible and result in significant
destruction of urban streams arid wetlands.

Under the existing CWA, §402{p)(3)(B)(iii), a statutory standard exists that NPDES
storm water  discharge permits issued to municipal separate storm sewer systems
require controls to reduce the discharge of pollutants in storm water to the "maximum
extent practicable" (MEP). The statutory standard can include management practices,
control techniques, and  system design and engineering  methods and other  such
provisions that the Administrator or State determines are necessary for the control of
such pollutants.  Because of the lack of a more specific definition of the statutory
standard of MEP, municipalities, permitting authorities, and members of the public are
uncertain  as to the extent of storm water control requirements a municipality  must
implement in its  storm water management program.

Provisions for Facilities with  No Exposure

EPA attempted to  exempt from storm water control requirements certain industrial
facilities that had no exposure of materials, equipment, or wastes to storm water.
However, this exemption of facilities without storm water exposure was overturned
by the Ninth Circuit.  Such  an exemption, if reinstated through legislation, would
create a strong incentive for facilities to implement pollution prevention.  It would
simultaneously accomplish environmental  objectives (reducing pollutants in storm
water) and greatly reduce administrative burdens for EPA, States,  and industries.

Deadline Extensions for Phase II

EPA is presently  required to  issue Phase II regulations  designating  sources for
permitting and establishing deadlines by October  1, 1993.  In the absence of new
regulations,  Phase II sources are required to  have permits after October 1, 1994.
Given the scope  and complexity of Phase II, EPA was unable to meet the October 1,
1993 regulatory deadline. Furthermore, EPA and authorized States will not be able
                                   -  117  -

 to  issue permits to all Phase II sources by October 1, 1994.  This may expose
 unpermitted dischargers, including many small municipalities or commercial enterprises
 posing small risks, to litigation for discharging without a permit. In addition, potential
 Phase II municipalities need additional time to develop the financial capabilities and
 institutional frameworks needed to comply with storm water requirements.

 Phase II Storm Water Requirements

 Phase II regulations must  be reasonable in scope and  establish a workable program
 that will focus on sources of storm water discharges that pose the highest risk. The
 Bureau of  Census has designated 396 urbanized areas  which  represent the most
 widespread and dense urban development. These urbanized areas occupy less than
 2 percent of the total land area of the United States but contain 165 million people,
 or about 65 percent of the total population of the United States.  In addition, most
 new development occurs in or adjacent to these urbanized areas. Between 1980 and
 1990, over 75 percent of  the national  increase in population occurred in  these
 urbanized areas.  However,  over 5,000 municipal entities in urbanized areas are not
 in Phase I of the NPDES storm water program.

 Authorize Municipalities to  Directly Regulate Storm  Water Facilities  Within  Their

 Under current CWA provisions, the storm water program requires permits for industrial
 activities even  if they  are discharging to  municipal  separate storm sewer systems
 which also must obtain storm  water permits.  Municipalities argue that this  is
 redundant and  inefficient,  and also  undercuts their effectiveness in directly dealing
 with an industrial facility.

 Inactive and Abandoned Mines

 It is estimated that there are  in the range of 400,000 or more inactive and abandoned
 mine sites (lAMs) on Federal  lands.  The environmental damages posed by these sites
 can vary significantly.  While  many sites are relatively benign, releases  from  other
sites  result in  significant environmental  degradation, even decades after active
operations  have ceased.  A  major administrative challenge is to (1) prioritize  these
sites that cause environmental problems so that the United States can address them
in a rational environmentally protective manner, and  (2) effectively protect water
resource quality by addressing these sites according to  the prioritized order. Another
major challenge  is to target control measures so  as to  achieve the  greatest
improvement in environmental quality for the limited Federal  resources that may be
available.  Although the estimates of total costs of mitigating water resource quality
impacts from lAMs vary significantly, they range into the many tens of billions of
dollars without  such cost-effective,  risk-based prioritization.
                                   -  118  -

A significant number of lAMs on Federal lands are believed to  have point source
discharges of pollutants, as defined under current statute and regulation, to waters
of the United States subject to regulation under the NPDES permit program.  Given
the large number of lAMs and the costs of mitigating sites causing  environmental
impacts, there is a need for a phased, cost-effective, risk-based prioritized approach
to mitigating these sources.


The Administration recommends that the CWA be amended to do the following—

Municipal  Compliance with Standards

*     Establish a phased permit compliance approach that requires best management
      practices in first-round municipal storm water permits, and through improved
      best management practices in second-round permits, where necessary, to move
      towards compliance with water quality standards.  In later permits, compliance
      with water quality standards  will occur using  water quality based effluent
      limits, where necessary. This would give EPA and municipalities additional time
      to evaluate the technical feasibility of establishing numeric effluent limits to
      meet water quality standards and give States time to develop  specific water
      quality standards appropriate for storm water discharges, if necessary.

*     The Administration  supports clarifying authority  under section 402(p)(3)(B)
      concerning "maximum extent practicable" (MEP).  In contrast to best available
      technology economically achievable (BAT) and best conventional pollutant
      control technology  (BCT) that are  applicable  for storm  water  discharges
      associated  with  industrial activities, under MEP, storm water management
      programs can be  implemented in a site-specific and flexible  manner to address
      the storm water management concerns in the municipality.  It should be made
      clear that MEP allows for the consideration of different factors including:  (1)
      the  severity of the impairment caused by the source, (2) the effectiveness of
      alternative approaches at reducing storm water discharges,  and (3) the cost of
      control measures. Under MEP, a storm water management program can target
      controls based on  differences  in the type  and size of  sources,  climate,
      geography, and water quality concerns. Based on a statutory clarification, EPA
      will  then issue  guidance on the best methods by which to  implement MEP in
      NPDES permits.

>•     The Administration  supports encouraging States to  review and revise their
      designated  uses  and water quality standards implementation procedures, as
      they develop water quality-based  permits, to reflect the episodic nature of
      storm water runoff,  the varying loadings during storm water events, and the
                                  - 119  -

      potential resilience  of  natural ecosystems to some infrequent,  temporary
      incremental loadings.

Provisions for Facilities with No Exposure

>•     Authorize EPA to exempt from individual storm water permitting requirements
      facilities that can certify that there is no nor will be exposure of industrial or
      other activities  or significant  materials to  rain water and snow melt.  This
      change would ensure that several hundred thousand low-risk facilities are not
      subject to NPDES requirements, allowing allocation of resources to more critical
      areas.  This would also effectively create incentives for facilities to eliminate
      contamination of storm water.

Deadline Extensions for Phase II

>•     Extend the Phase II deadline for EPA issue to regulations to October 1, 1997.
      Also, extend the deadline to  obtain a permit to October 1,  1999.   These
      extensions are necessary to allow EPA to work with States and municipalities
      in  developing workable, effective  regulations.  Extending the deadline for
      permits would give municipalities an opportunity to begin to build institutional
      frameworks  and provide the  funding  necessary  to  implement storm water
      management programs.  It would also allow permits  to be issued to Phase II
      municipalities at the  same time Phase I permits are expiring. This will promote
      regional and  watershed-wide permitting by allowing different  municipalities to
      be co-applicants and coordinate their storm water programs.

Phase II Storm Water  Requirements

*•     Focus Phase II requirements on system-wide permits for municipal separate
      storm sewer systems in Census-designated urbanized areas with a population
      of 50,000 or more.

>     Target storm water management programs for municipal separate storm water
      systems (MS4) in the 138 Phase II urbanized areas associated with a  Phase  I
      permitted MS4  to address,  at a minimum, non-storm water discharges into
      storm sewers and storm water runoff from growth and  development and signifi-
      cant redevelopment. The CWA should encourage NPDES permitting authorities
      as part of a watershed approach to implement a more comprehensive municipal
      storm water  management program where appropriate based on water quality
      impairments  or  other factors for the MS4s in these urbanized areas.  In the
      remaining 258 Phase II  urbanized areas, storm water management programs
      would be required which focus only on controlling non-storm water discharges
      into storm sewers and storm water runoff from growth and development and
      significant redevelopment activities.
                                  - 120 -

+     Under  Phase II for those  MS4s required to  implement a  storm  water
      management  program  targeted  to  growth,  development and significant
      redevelopment and illicit connections, the municipal program will control those
      Phase II storm water sources, including discharges from construction of less
      than 5  acres,  which  are  part  of  growth, development, and significant
      redevelopment activities and may address,  where appropriate, subject to the
      MEP standard, those Phase  II sources causing water quality impairment.  For
      those municipal separate storm  sewer systems required by the  IMPDES
      permitting  authority to  implement  a  more  comprehensive  storm  water
      management  program,  Phase II  light industrial, commercial,  retail, and
      institutional storm  water sources would be addressed  through the program
      under the municipality's NPDES storm water permit, which meets the MEP
      standard.  Phase II sources not addressed through a municipal program would
      not be covered by the NDPES program.

+     Do  not  directly regulate Phase  II light industrial,  commercial, retail, and
      institutional storm  water discharges, and  municipalities outside  of Census-
      designated urbanized  areas under the NPDES  program,  unless otherwise
      designated by the  permitting  authority for inclusion  in the NPDES program
      under §402(p)(2)(E) of the CWA.  (EPA does not expect that this designation
      process would be used, except in  highly-unusual circumstances, to require an
      NPDES permit for a typical  homeowner.)  Rather, such discharges could be
      addressed by  NPS program, if they were a targeted source.

Authorize Municipalities to Directly Phase I Industrial Regulate Storm Water Facilities
Within Their Jurisdiction Under the NPDES Program

>     Allow EPA and authorized  States to authorize  municipalities  to  establish
      programs for Phase I industrial storm water permit issuance and controls, where
      it has the appropriate authority, and is willing to commit to implement Federal
      requirements.   EPA does not envision Federal  funding to be available to
      municipalities to perform this function.  This recommendation is similar to the
      industrial pretreatment program currently authorized under the CWA. As in the
      industrial pretreatment  program,  storm water  permits and controls that are
      issued  by municipalities  in  an EPA-approved  program would be  Federally

Inactive and Abandoned Mines

»•     The  Administration recommends that the  CWA be  amended to make  the
      following changes to the NPDES permitting program to target control measures
      so as to achieve the greatest improvement in  environmental quality  for  the
      limited Federal resources available for inactive and abandoned mine sites (lAMs)
      without an operator present:
                                  - 121  -

The Administration supports clarifying authority to issue NPDES permits
on a State-wide basis for lAMs within resource management units (e.g.,
one permit  per State for the National Forest Service, National  Park
System, Bureau of  Land  Management, or Fish and Wildlife Service
resource areas). This would  allow Federal land managers to establish
State-wide priorities based on impairment or threats to water resource
quality  and  the most effective  use of the available resources.  Such
priorities could allow some sites not to be controlled or be  subject to
relatively less stringent controls.

The Administration  supports an amendment to substitute, for existing
technology-based requirements  under the NPDES program for lAMs on
Federal  lands, the authority for Federal land managers to identify water
resource quality that is threatened or impaired by lAMs and to  implement
targeted controls for such  sites, similar to existing authority for permits
for  municipal separate  storm  sewer systems contained  in section

The Administration further supports allowing, in general, no  more than
up to ten  years to meet appropriate water quality  standards within a
resource management unit, as defined in the language above, from the
date of  issuance of an NPDES permit to the Federal  land manager. The
Federal  land manager would be expected during this period to 1) strive
to achieve water quality  standards as  expeditiously  as  possible,  2)
continue to  assess the water resource quality impacts of  lAMs where
they are currently unknown, and 3) continue to implement targeted
controls for  those sites causing  impairments or threats once  identified.
This provision should not apply to lAMs which were permitted under the
NPDES  program prior to the date of enactment.

The Administration  supports encouraging States to review  and revise
their designated uses and water quality standards implementation proce-
dures, as they develop water  quality-based  permits,  to reflect  the
episodic nature of storm water runoff, the varying loadings during storm
water events, and the potential resilience of natural ecosystems to some
infrequent, temporary incremental loadings.
                            -  122 -


Should requirements for CSOs be specifically authorized in the CWA?


As many as 1100 cities (almost 85 percent of which are located in the Northeast and
Great Lakes areas) serving  a  population of 43,000,000, have combined sewer
systems that overflow and result in the discharge of raw sewage, commercial and
industrial wastes and storm water to waters of the U.S. during wet weather events.
State water quality assessments have shown CSOs to be responsible for water quality
impairments, beach closures, fish kills and shellfish bed closures. The 1992 Needs
Survey Report estimates costs to properly control discharges from CSOs to be $41.7

In 1989, EPA took initial steps to address the CSO problem by issuing a CSO strategy
calling for positive actions  toward  abating  CSOs  and  achieving  water  quality
standards. EPA has circulated a draft "Combined Sewer Overflow Control Policy"
(January 1993) that comprehensively expands the 1989 CSO  policy and will  drive
future actions.  This draft policy was developed through negotiations with State,
environmental, and municipal representatives. Public comment on the draft has been
highly supportive.  The draft policy contains provisions for developing appropriate,
site-specific NPDES permit requirements for all combined sewer systems that overflow
as a result of wet weather. The draft policy also announces an enforcement initiative
to require immediate elimination of overflows that occur during dry weather.


+    The Administration recommends that Congress in the 1994 amendments to the
      CWA endorse the new CSO Policy and its principles. The CSO Policy ensures
      that municipalities, permitting authorities, water quality standard authorities,
      and the public engage in a comprehensive and coordinated planning effort to
      achieve cost effective  CSO controls that ultimately meet the appropriate health
      and environmental objectives.  The key principles are:  (1) providing  clear
      targets of control that would be "presumed" to meet water quality standards;
      (2)  providing  sufficient flexibility  to municipalities,  especially  financially
      disadvantaged communities, to consider the site-specific nature of CSOs and
      the incremental pollution reduction achieved and incremental cost of a range of
      control options  in developing long-term plans; (3) allowing financial capability;
      and, (4) review and revise, as necessary, water quality standards and their
      implementation procedures when developing CSO control plans to reflect the
      episodic nature of overflow events and local ecosystem conditions.
                                  -  123 -

The EPA Administrator will develop further guidance on the implementation of
the CSO policy  that  recognizes and properly reflects  these  principles and
encourages innovative approaches for achieving the objectives of the policy.
                            -  124  -

How should CWA pretreatment requirements be revised to strengthen and fapilitate
implementation of controls on indirect discharges to POTWs?


The National Pretreatment Program is a joint regulatory effort by EPA,  States, and
municipalities to ensure that non-domestic discharges of pollutants to publicly owned
treatment works (POTWs) do not interfere with POTW operations, pass through to
receiving waters, or contaminate sewage sludge.  The pretreatment program has
evolved considerably over the  past twenty years, and now extends to more than
200,000 non-domestic sources (including 30,000 significant industrial users).  The
program is implemented primarily at the local level, where approved local pretreatment
programs at over 1,5000 POTWs address nearly 80 percent of the nation's municipal
wastewater flow annually.

Experience with the pretreatment program leads the Administration to  recommend
statutory changes to provide authority to allow EPA to issue control mechanisms to
industrial users, and modify the scope of the Domestic Sewage Exclusion (DSE) within
the CWA.

Permitting Indirect Users

EPA does not have the authority to issue discharge permits to lUs of POTWs even
where EPA must act as the pretreatment control authority  (i.e., where there is no
approved State or local pretreatment program), or where the control authority fails to
issue a control mechanism in a timely manner.  The lack of such permitting authority
for EPA results in complicated enforcement of pretreatment requirements. In addition,
this may also result in disparate regulation of similarly situated industries.

Domestic Sewage Exclusion

Wastes that would otherwise  be regulated as hazardous wastes under RCRA are
regulated solely  under the CWA (and not RCRA) if discharged to POTW collection
systems. There is some concern that such wastes are not adequately regulated under
existing CWA pretreatment authorities.  The Administration,  however, opposes
repealing the DSE because it believes that existing pretreatment authorities generally
are adequate to  control  discharges of RCRA hazardous wastes to POTWs.  The
Administration does, howevejr, recommend narrowing the applicability of the DSE
under the CWA.
                                  -  125 -


»•     EPA should be authorized to issue permits to those IDs for which EPA is the
      control authority.  EPA should also be authorized to enforce all ID  permits
      through administrative and judicial (both civil and criminal) procedures.

>     EPA/State should be authorized to develop local limits if there is no local control

>•     The Administration  proposes to amend  the CWA to prohibit discharges of
      material in domestic sewage that otherwise would be considered hazardous
      waste under RCRA into a  POTW unless:

      o    the source is subject to and in compliance with an applicable categorical
           standard, or is subject to a general pretreatment standard established to
           regulate waste  having the hazardous  characteristics  of the waste

      o    the wastestream and source are scheduled under CWA §304(m) to be
           regulated within five years to a new or revised pretreatment standard;

      o    the waste is introduced in de minimis amounts  (by households,  non-
           commercial  entities,   non-commercial  entities,  government office
           buildings, or similar sources only);

      o    the pollutant and source are in compliance with a local limit regulating
           the hazardous constituents  or that  is  a reliable  indicator  for  the
           hazardous constituents;

      o    the pollutant and source are in compliance with a technology-based local
           limit established by the pretreatment  approval authority (for  sources
           discharging to non-pretreatment POTWs only);  or

      o    the wastestream and  source  will be subject in accordance  with  a
           statutory schedule, to a Toxic Reduction Action Plan, as defined by the
           statute, developed by  the POTW to reduce discharges of hazardous
           wastes and toxic pollutants.

     The proposed revisions to the DSE would also require each pretreatment POTW
     to develop a Toxicity Reduction Action Plan (TRAP) for commercial users that
     are not subject to (or scheduled to be subject to) categorical standards.  TRAPs
     would  reduce hazardous waste  and toxic pollutant discharges to  POTWs
     through means such as public education, best management practices, and
                                 -  126  -

technology-based local limits. EPA would provide guidance on the development
and implementation of such plans.
                           - 127  -


                    CHAPTER 7--MONITORING

Water quality monitoring of physical, chemical, and biological conditions is essential
for setting strategic planning  goals, describing  water  quality status  and  trends,
detecting  water  quality  problems, helping  design  protection,  restoration,  and
remediation  programs, and measuring  environmental results.  Monitoring and data
management programs cover many activities, including: data collection; data analysis;
information storage and retrieval; and evaluation and reporting.  Many Federal, State,
Tribal, local, private, and volunteer agencies and groups monitor water  quality.
Monitoring is required by  the CWA, other statutes, and  agency programs.

The Administration proposes to strengthen the CWA by working with the States to
outline minimum monitoring requirements for State programs under CWA authorities.
Stronger State monitoring programs will help to focus CWA programs on waters that
need  management attention.   More comparable State monitoring programs will
generate compatible information  to  aggregate  into a  nationwide water  quality
assessment.  Stronger State imonitoring programs also  will help State  and  Federal
agencies do a better job of determining  whether our environmental management
programs are achieving the environmental results that we seek.

The Administration also proposes an improved inventory and reporting system. Every
five years, States would take inventory of their impaired, threatened, and high quality
waters that need special protection.  The States would provide a list of such waters
to EPA for approval. The inventories would complement reports submitted on the
overall condition of water quality throughout the States, as already required under
Section 305(b).  In addition to  information from  the inventories, the State 305(b)
reports and EPA's aggregation of them in its report to Congress would draw upon the
scientific information gathered  by many other  programs.   These comprehensive
inventories and reports would provide  an excellent basis for establishing national
priorities for pollution prevention, restoration, and management programs  and for
applying Federal, State, and local resources and control requirements in the most cost
effective manner.

The Administration is committed to compatible and well-coordinated water quality
monitoring programs. Major Federal, State, and other public and private monitoring
agencies are working together on the Intergovernmental Task Force on Water Quality
Monitoring (ITFM).  The ITFM  has already proposed a national strategy for water
quality monitoring that addresses the institutional framework to conduct monitoring;
environmental indicators to measure progress toward national goals; comparable data
collection methods and data management systems; and  national reporting of water
quality conditions.  The Administration strongly supports  this successful Task Force.
                                  - 128 -

What is the best way to strengthen State and Tribal water quality monitoring


State and Tribal water quality monitoring programs generate important  data and
information  necessary to  guide  water quality management decisions and track
environmental progress. Water quality monitoring programs support States and Tribes
as they implement their own water management programs and the many CWA
programs delegated  to them by  EPA.   Stronger State monitoring and  data
management programs will help to better target the waterbodies that need the most
attention for clean up, better protect areas that already meet water quality standards,
and begin to assess waters about whose health little is known. Stronger State water
quality monitoring programs also will help the States, EPA, and other Federal agencies
do a better job of determining the extent to which management and control programs
are achieving the environmental results that we seek.

Greater comparability is needed among State water monitoring programs and among
the analytical methods that all water quality monitoring programs depend upon. The
current lack of comparability hinders the usefulness of data and prevents aggregation
of information on a National basis.  Furthermore, more efficient and better coordinated
and targeted monitoring programs will more  fully  support integrated watershed
management, including the development of appropriate goals and indicators as well
as the measurement of success.

Currently, section 305(b) requires States to submit reports to EPA every two years,
however, there are not sufficient  resources to carry out comprehensive State-wide
assessments on  this time frame.   Consequently, 305(b) reports can  only provide
information on a  portion of the Nation's waterbodies.  If the period between reports
were extended from two to five years, States could gather and analyze sufficient data
to provide a more comprehensive  "snapshot" of the condition of their waterbodies.


>    The Administration proposes that the CWA should direct EPA to  work closely
     with States  and other Federal agencies  to establish effective minimum
     monitoring and reporting requirements.  Such State  monitoring requirements
     should be established as part of a coordinated national monitoring strategy and
     include appropriate incentives to ensure compliance.
                                 -  129 -

In addition, the CWA should also change the requirements for the 305(b) report
from a two-year  cycle to a five-year cycle, and specifically include water
resource data from other Federal agencies.  A longer reporting cycle would
allow States to assess all their waterbodies over the reporting time period, and,
if States and Federal agencies use comparable methods in their assessments,
will enable the 305(b) report to be used to portray water quality trends. While
States would submit a formal 305(b) report every five years, they should also
submit to EPA, electronically if possible, annual updates of key information,
such as strategically determined environmental indicators.
                              -  130  -

                         INVENTORY OF WATERS
How  should  States  identify impaired,  threatened, and  special  protection waters
(including wetlands) and establish priorities for water quality management activities?


The CWA contains numerous requirements, some added in previous reauthorizations,
to characterize water quality. The proliferation of these requirements has resulted in
an  array of lists, reports and schedules.  For example, §305(b)  requires States to
report to Congress; §303(d) requires States to identify water quality limited waters
and establish priorities for waters needing control measures through Total Maximum
Daily  Loads (TMDLs); §314(a)  requires States to assess lakes as a prerequisite to
receiving  §314 grants; §319(a) requires  States to identify waters that are not
expected to meet standards without control of nonpoint sources; and, §304(1) requires
States to identify problem waters according to 3 categories.

Each of these requirements was intended to fulfill a specific information or program
need. However, as the water program matures and the protection and restoration of
living  aquatic resources is recognized as an overall goal along with protection of
human health, single purpose, overlapping lists and reports become more and more
ineffectual.  This decline in utility is reflected in redundant and overlapping program
requirements and the  associated waste of scarce State and EPA financial and
personnel resources.

More importantly, a comprehensive inventory and listing of threatened, impaired, and
special resource waters could provide an excellent tool for applying Federal, State, and
local resources and control requirements in the most cost effective manner. This is
needed because single  purpose lists do not effectively support the targeting efforts
that are needed to  select the  most important areas in which to dedicate scarce


>•     The Administration recommends that the CWA provide for a comprehensive
      State inventory of waters under a new section 305(c).  This inventory  would
      satisfy the requirements of other lists of waters required by the CWA.  The
      comprehensive inventory of waters would provide one list of waterbodies and
      wetlands for each State  to  be  used as a common basis  for planning,
      management, and protection.  For example, the inventory would be used to
      help write §305(b) reports; revise water  quality standards  under §303(a);
      identify waters requiring TMDLs under §303(d); determine site management
                                  - 131  -

measures required under  §319; establish permit issuance schedules under
§402;  and  determine  watersheds  for which comprehensive  watershed
management plans would  be developed and implemented under §321.

Each State inventory would build upon existing sources and readily available
data and would contain: (1) a list of waters, including urban waters, wetlands
and estuaries,  for  which  existing pollution control requirements are not
expected to be stringent  enough to achieve applicable State water quality
standards; (2) a list of waters, including urban waters, wetlands and estuaries,
in which the achievement of State water quality standards is threatened by any
pollutant, factor, or combination thereof; (3) a list of waters, including urban
waters,  wetlands and estuaries, that require  protection  of drinking water
supplies, protection of endangered species or habitat supporting threatened or
endangered species, or high  quality  waters,  special protection waters, and
special  protection as outstanding natural resource waters or waterbodies
(including priority ground waters that are directly hydrologically connected to
surface waters) as the State or EPA may determine; (4) an identification of the
categories and subcategories of sources causing or substantially contributing
to the failure to meet applicable State  water quality standards for each
waterbody,  including  urban waters,  wetlands and estuaries;  and (5)  a
delineation of watersheds for all waters listed, including urban waters, wetlands
and estuaries.

Each State would need to provide for public review of  their proposed State
comprehensive inventory  of waters prior to submission to EPA.   EPA would
review the inventory and  within 90 days approve,  conditionally approve, or
disapprove the  State inventory.  In exercising this authority, EPA  would  seek
input from federal  natural resource trust agencies.  In the absence of  an
acceptable State submission, EPA would prepare and publish a comprehensive
State watershed inventory for a State.

EPA would base approval or disapproval of State lists on relevant data from the
States, other Federal agencies  and other relevant sources, to  ensure that all
appropriate data are included in the inventory.

Each State would be required to make the §305(c) lists widely and publicly
available in communities across the State.  Such lists should be in forms that
are easily understood (e.g., maps) and may be placed where they are readily
available to the public  (e.g., public libraries).

The schedule for the development of this inventory shall be consistent with the
other requirements or guidance issued under this  Act.  The  first inventory
should be required within 2 years of enactment, and subsequent inventories
every 5 years thereafter.
                             -  132 -

 How should the water monitoring activities of Federal,  Regional, State, and local
 agencies, Indian Tribes,  and private organizations be coordinated to  support the
 mandates of the CWA?


 Water monitoring activities include the collection, analysis, processing, interpretation,
 and reporting of water information. Many agencies collect information on surface
 water  and ground  water quantity and  quality, sediment erosion, transport, and
 deposition, sediment quality, wetlands, aquatic communities, atmospheric deposition,
 and water use.  While the CWA emphasizes water quality monitoring, other kinds of
 water and habitat information are essential for the interpretation and analysis of water
 quality conditions and trends and the identification of cause and effect relationships.
 For example, the computation of pollutant loads carried by rivers requires both water
 quality information and stream discharge information, and the assessment of aquatic
 habitat requires information about the geometry of the stream channel.  Because
 water data collection responsibilities are dispersed among all levels of government, the
 identification and implementation  of opportunities to make better use  of available
 resources for water monitoring requires cooperation and  coordination among many
 agencies and organizations.

 Currently, State and  Federal agencies  and the private sector spend hundreds of
 millions of dollars to collect water quality monitoring information. These expenditures
 do not always yield information needed to support newer program directions such as
 watershed management  and ecosystem  protection.   In particular,  information  is
 needed to evaluate the status and trends of ambient water quality at regional and
 national levels; to establish water quality standards; to evaluate the effectiveness and
 performance of water quality control programs; and to anticipate emerging problems.

 The Office of Management and Budget (OMB), recognizing the need to  improve the
 coordination of  Federal water information programs and to develop effective working
 relationships with State and local agencies, Indian Tribes, and the private sector,
 established the  Water Information Coordination Program (WICP) in December 1991
 (OMB Memorandum No.  M-92-01).  Activities of the WICP are overseen by a sub-
 Cabinet level Steering Committee and carried out by a Federal Interagency Committee
 on Water Data, and a  Federal advisory committee.  Coordination also is maintained
 with the Federal Geographic Data Committee. In January 1992, the WICP established
the Intergovernmental Task Force on Monitoring Water Quality (ITFM)  to evaluate
 water quality monitoring  activities in the U.S. and recommend improvements.
                                  - 133 -

A report to OMB of the ITFM's first year's activities outlines a proposal to carry out
a national  strategy to  enhance  water quality activities  and to support  better
management decisions. The strategy includes the establishment of a national council
and regional entities to coordinate Federal and non-Federal water monitoring activities.
ITFM  task  groups are addressing issues of  data  sharing and access, the use of
environmental indicators to evaluate whether the water quality of a waterbody meets
its designated  use, the  establishment  of  performance-based methods for data
collection and analysis, and the development of recommendations for assessing and
documenting the condition of water resources. The ITFM also has established several
prototype  field  coordination  efforts and proposes to initiate  a Methods and Data
Comparability Council to provide guidance on the development of performance-based
data collection methods and protocols to enhance determination of data comparability.
Representatives of Federal, Regional, State, and local agencies, Indian Tribes, and the
private sector are involved with ITFM at the regional and State levels throughout the
country to  discuss the proposed strategy and to identify the  next steps needed to
improve the field coordination of monitoring activities.

Coordination of water monitoring activities  is urgently needed to support water
planning, management,  and  regulatory activities at all levels of  government.  The
Administration has recognized this need and has put in place mechanisms to improve
intergovernmental coordination.  The CWA should recognize the  need for improved
coordination and enhance the ability of Federal, State, and other agencies to work
together to achieve common monitoring goals. Existing mechanisms, especially the
ITFM  and the WICP are working well, and, the scope of ITFM may be easily modified
to meet changing  needs for coordination.   For example,  the scope  of OMB
Memorandum M-92-01  could  be expanded  to include marine waters to improve
coordination between freshwater  and saltwater monitoring activities.


*•     The Administration recommends that the CWA should recognize the need for
      improved collaboration of water quality monitoring activities, and complement
      or enhance existing activities, not duplicate  or supplant them.  In particular,
      EPA and other Federal agencies should continue to use existing coordination
      mechanisms, such as the  Intergovernmental Task Force  on  Water Quality
      Monitoring and the Water Information Coordination Program, to coordinate their
      water information activities and identify emerging areas of need.
                                   -  134  -



The CWA should acknowledge and better coordinate the water quality research and
monitoring activities conducted by all Federal agencies in support of their missions and
Federal statutes.


Many Federal agencies conduct water quality research and monitor water quality as
part of their missions. These activities may be mandated by Federal statues, such as
the Coastal Zone Management Act (NOAA), the Safe Drinking Water Act (EPA), the
Marine Protection,  Research,  and Sanctuaries Act (NOAA), and the National  Forest
Management Act (Forest Service).  They also may support land and natural resource
management programs (National Park  Service,  Fish  and  Wildlife Service,  Forest
Service, NOAA, and Bureau of Land Management) or advance scientific understanding
of hydrologic and environmental processes (USGS, Agricultural Research Service,
Department of Energy, and NOAA).

These activities are conducted independently of the mandates of the CWA but can
contribute much to the  knowledge base and scientific understanding needed to
administer the provisions of the Act. For example, USGS studies develop information
on the quantity and quality of water resources with particular emphasis on hydrologic,
hydrogeologic, and geochemical processes,  many of  which are undertaken in
cooperation with State and local agencies.  The USDA investigates the impacts of
agriculture and forestry practices on water quality, and NOAA monitors coastal waters
to assess the  status and trends of environmental quality.   The Army Corps of
Engineers is studying wetlands restoration and hydrogeomorphic evaluation of
wetlands functions.

The information produced by these and other programs can provide crucial information
that can be used  to  support  CWA goals.  Attainment  of these goals can  be
significantly enhanced by using the wide range of water quality related information
generated by all agencies.

Because water quality research is carried out for purposes other than support of the
CWA, it is appropriate that research should be coordinated by an existing interagency
mechanism like the National Science and Technology Council  (NSTC). NSTC will be
a prominent forum for the exchange of information about agency research activities
and for developing  coordinated plans for future research.
                                 - 135  -


>•     The Administration proposes that language be added to the CWA to recognize
      and acknowledge the water quality research and monitoring undertaken to
      support statutes such  as  the  Coastal Zone Management Act,  the Marine
      Protection, Research, and Sanctuaries Act, the Safe Drinking Water  Act, the
      National Forest Management Act, the Food Security Act, the Food, Agriculture,
      Conservation, and Trade Act, and many other related initiatives and programs.

*•     The Administration also recommends interagency coordination of existing and
      expanded monitoring under the National Coastal Monitoring Act, the Clean
      Water Act, the Marine Protection,  Research, and Sanctuaries Act, and other
      statutes that provide the information needed to evaluate the effectiveness of
      Clean Water Act programs in protecting U.S. waters and associated resources.

>     In addition, research activities authorized by the  CWA should be coordinated
      with activities mandated  by other environmental  statutes  using  existing
      mechanisms, such as FCCSET.
                                  - 136 -





 How should the National Estuary Program (§320) be strengthened so that EPA can
 provide  funds  to  Management Conferences  for  overseeing and facilitating
 implementation of management plans?


 The National Estuary Program (NEP) was established under §320 of the  CWA, as
 amended in 1987.  Its mission is to identify nationally significant estuaries, protect
 and improve their water quality, and enhance their living resources.  Through the NEP,
 EPA brings together key Federal, State and local,organizations to comprehensively
 address problems in each estuary using a watershed protection approach.  Each
 estuary project in the NEP is managed by a collaborative body called the Management
 Conference, which uses a consensus-building process to identify major environmental
 problems in the estuary and develop Comprehensive Conservation and Management
 Plans (CCMPs) for addressing them.

 The NEP currently includes 21 programs:  Casco Bay, ME; Massachusetts  Bays and
 Buzzards Bay, MA; Narragansett Bay, Rl; Long Island Sound, CTand NY; Peconic Bay,
 NY; San Juan Bay, PR; New York-New Jersey Harbor,  NY and NJ; Delaware Estuary,
 NJ, PA, and DE;  Delaware Inland Bays, DE; Albemarle-Pamlico Sounds, NC; Indian
 River Lagoon, Tampa Bay,  and Sarasota Bay, FL; Barataria-Terrebonne Estuarine
 Complex, LA; Galveston Bay and Corpus Christi Bay, TX; Santa Monica  Bay and San
 Francisco Estuary, CA; Tillamook Bay, OR; and Puget Sound, WA.  Puget Sound,
 Buzzards Bay, and Narragansett Bay have completed CCMPs that have been approved
 by the EPA Administrator. Six other programs are expected to complete their CCMPs
 in FY 1994.

 At present, EPA can provide no financial assistance  to Management Conferences
 under §320 once the CCMP is completed, because §320(g)(2) allows grants  to be
 awarded only for the development of CCMPs. However, under §320(b). Management
 Conferences must coordinate and facilitate the implementation of the plan, assess the
effectiveness of implementation of the plan, and review proposed Federal projects for
consistency with the CCMP. These statutory responsibilities cannot be met until the
CCMP is completed and implementation begins, yet §320 provides no grant authority
to support these activities. Because the development and implementation of a CCMP
should be an iterative process, these  monitoring and oversight responsibilities are
critical so that mid-course corrections  in management actions can be made.
                                - 137  -

For implementation of CCMP action plans, §320 directs that funding be sought from
monies appropriated under Title II (construction grants), Title VI (SRF), and §319 (NPS
grants).  The  Administration  recognizes that the major responsibility for  CCMP
implementation remains with  the  States and localities where the benefits will be
realized.  Specific NEP Implementation grants and set-asides under the CWA would
remove incentives to obtaining funds under existing  authorities that may be more
tailored to specific CCMP action plans.  For example, activities in approved CCMPs
are eligible under the construction grants, SRF, and NPS grants programs. Rather
than changing the CWA, the Administration believes that States should revise their
SRF and NPS funding priorities to reflect CCMPs.


+     The Administration recommends that  §320 be amended to provide EPA the
      authority to award grants from currently available funds to support limited
      oversight  and facilitation activities.   Management Conferences  would be
      extended or reconvened to conduct such oversight activities for a limited time,
      after which States would be expected to incorporate NEPs into their watershed
      management programs.  CCMPs would need to be modified to meet the criteria
      for  watershed  management plans under  State  watershed  management
      programs.  (See Chapter 4  on Watershed Management and the following
      discussion of  NEP and Watershed Management.)
                                  - 138  -

What would be the relationship of the National Estuary Program to the proposed State
Watershed Management Program?


While EPA's National Estuary Program (NEP) and former Near Coastal Waters Program
(NCW) have conducted action planning projects in about one quarter of the estuaries
in the contiguous 48 States, they have also produced a body of methods, training
programs, and other knowledge which can readily be transferred to other coastal and
estuarine areas and similar efforts in any watershed.  This technology and knowledge
represents significant advancement in localized geographic targeting, multi-agency
integration, consensus building, and ecosystem protection.  Central to the success of
the NEP is the use of basin-wide and watershed-wide targeting approaches to identify
priority problems.   In the proposed State Watershed  Program (see Chapter 4)
individual NEPs could provide much of the coastal component of the State Watershed
program (as they are doing often in the case of the nonpoint source pollution control
plans required  under  section 6217  of  the Coastal Zone  Act  Reauthorization
Amendments). The challenge is to build on what has been learned over the last eight
years of the NCW and NEP and have the NEP and the State Watershed Programs be
mutually supportive.

The  proposed State Watershed  Program presents  a managing framework that is
already employed by the NEPs.  Furthermore, several of the NEPs are working on
CCMPs that give detailed action plans for the  surrounding watershed  (including
interstate) as well as for the estuary itself. Through amendments to the CWA, the
NEPs and State Watershed Programs could be tied together by providing requirements
and incentives for the CCMPs to be approvable under and consistent with the State's
new watershed  program.  In some coastal States,  the NEP could fulfill the coastal
component of the watershed program and, in other States, be the beginning focal
point and catalysts for the watershed program.   While full NEPs  would not be
necessary in  all estuaries, NEPs and other  EPA coastal  programs  could provide
technical  assistance and guidance to coastal watershed management entities to help
accelerate the development of their plans.   In particular, NEPs  have significant
interstate experience and also have studied many controversial topics such as
implementation financing alternatives.  In addition, NEPs may have already activated
key stakeholders who would have interests in broader watershed efforts.
                                 - 139 -


Changes to the CWA are necessary to ensure linkage of NEPs and State watershed
programs. The Administration recommends that:

+     In order to receive additional funding under section 320, NEPs in States with
      approved watershed management programs should be required to modify their
      CCMPs to  be consistent  with the  States'  requirements for  watershed
      management plans. CCMPs developed under the NEP may be considered for
      approval as watershed management plans in States with approved watershed
      programs.  If approved as watershed management plans, then CCMPs should
      be eligible for incentives under the watershed program.

>     Future NEPs  should be designated only if such action is consistent with the
      States watershed program and, after five years after enactment, only in those
      States with approved watershed programs.
                                 -  140  -



 How should the CWA be revised to strengthen protection of ground water and better
 support efforts to protect sources of drinking water?


 Ground water is a vitally important resource; it supplies half of the Nation's drinking
 water and, on average Nationwide, 40 percent of annual streamflow. Ground water
 also discharges into lakes, wetlands, and estuaries. States have identified a broad
 range of ground water contaminants and  contamination sources that threaten the
 resource, including sources that come under the authority of the CWA. In addition,
 a 1990 EPA survey of pesticides in drinking water showed that about 10.4 percent
 of the community water system wells nationwide contain detectable levels of one or
 more pesticides and that as many as 1,130 wells, serving some 3 million people, may
 have levels of  nitrates above  current health  standards.   Studies of such critical
 ecosystems as the Chesapeake Bay and the  Everglades show that ground water
 discharges to surface waters can be a major source of contamination.

 Despite the importance of ground water and the potential threats to human health and
 ecological systems from its contamination, ground water protection is not a major
 focus of the CWA.  For example, ground water is  not mentioned in the Goals and
 Policy section of the CWA, and throughout the Act terms such as "navigable waters"
 and "water quality standards" are intentionally limited to surface waters.  However,
 water quality standards as implemented by NPDES permits, cannot adequately protect
 ground water sources.

 In meeting human health objectives, watershed management programs could play a
 major role in helping prevent contamination of all sources of drinking water for public
 water systems. Preventing contamination  of source waters represents the first line
 of defense against public health risks and escalated monitoring and treatment costs
 associated with meeting surface and drinking water quality standards.  Coordination
 between watershed management programs and ground-water protection programs
 operating in the same watershed will be particularly important if the Administration's
recommendations for amending  the SDWA to establish prevention-based programs to
protect sources of drinking water are enacted. States should be encouraged to build
on existing Comprehensive State Ground water Protection Programs.
                                  -  141  -


The Administration recommends that the CWA be amended as follows:

»•     Add a national  policy statement to the Goals and Policy section [101 (a)] to
      acknowledge the interrelatedness of ground waters and surface waters and to
      state that CWA programs should reasonably avoid implementing actions to
      protect one medium at the expense of the other.

>     Strengthen protection of human health as an objective of the CWA by adding
      public drinking water protection to the interim water quality goal in Goals and
      Policy subsection [101{a)(2)].

>     Include human  health  protection from drinking water  contamination as  an
      important objective  of provisions  establishing watershed  management
      programs. This will facilitate protection of drinking water sources as required
      by the SDWA.

*     Confirm and clarify that a point source discharge to ground or to ground water
      that has  a direct hydrological connection with  surface waters is subject to
      regulation as a NPDES point source discharge if there is  (1) a reasonably
      foreseeable direct hydrologic connection to surface waters in the proximity of
      the release, (2) a  greater than de minimus quantity of the pollutant must
      reasonably be able to reach the surface water, and (3) no other Federal  statute
      directly addresses the activity causing the release.

+     Include  priority ground waters  and  public  drinking  water supplies  in any
      amendments  to the  CWA  that require  or  encourage States to develop
      inventories of waterbodies and delineated watersheds  to use as a basis for
      planning  and protection.

+     To any amendments to  §305(b) that establish State water quality monitoring
      programs, include as a requirement  of these programs that States  provide
      indicators, to be determined by EPA, on the quality of  current or reasonably
      anticipated sources of drinking water and require coordination with significant
      Federal,  State,  and local monitoring  programs  (including State and  Federal
      drinking water and ground water monitoring  programs).

*•     Amend §305(b) to allow States, at their discretion, to  include in their water
      quality monitoring programs monitoring of ground water to determine  ground
      water quality and the interaction between  water pollution problems in  ground
      water, surface water, aquatic sediment, and wetlands.
                                   -  142  -

Provide that State grant provisions in the CWA (e.g., 106, 319) continue to
allow funding of State ground water protection activities.

To the extent possible, make the CWA amendments consistent with the SDWA
or any  amendments thereto.
                            -  143 -



 How should  the  CWA be amended to foster tribal assumption of water quality


 Tribal governments have made great progress in developing and implementing EPA's
 water programs since the 1987 CWA Amendments included §518, which addresses
 Indian water program development and assumption.  Section 518 authorizes EPA to
 treat Tribes that meet certain prerequisites  in the same manner in which it treats
 States, for purposes of specific programs for which Tribes are eligible to apply for
 grant funding and/or to administer.  It also establishes specific requirements a Tribe
 must comply  with  in order to be treated  as States  for  purposes of  assuming
 administration of  water programs.  Section  518 also sets forth  a  specific funding
 limitation for  grants to Tribes under §319.

 EPA has issued final regulations identifying requirements for Indian Tribes to be
 treated as States for purposes of water programs, with the exception of the NPDES
 Permit Rule which will be finalized shortly. Approximately 80 "Treatment as a State"
 determinations have been made under various  CWA grant programs.   EPA  has
 approved the Water Quality Standards Program developed by the Pueblo of Isleta,
 Pueblo of Sandia and Pueblo of San Juan. EPA also expects other Tribes to apply for
 assumption of other environmental programs shortly.  Many Tribes have made
 significant progress in developing the capacity and identifying the resources necessary
 for program assumption.

 Despite this progress, EPA and Tribal officials have experienced a  number of barriers
 that complicate Tribal assumption of water programs. Some of these barriers are due
 specifically to provisions of the current CWA and  should be addressed through
 amendments to the law.  These statutory barriers are exacerbated by current budget
 constraints being experienced across  the  Federal government.    To  ensure
 environmental protection of water resources on Indian lands, we need to establish an
 efficient Indian program under the CWA - one that  minimizes administrative burden,
 provides an appropriate amount of flexibility, and supports the Federal government's
 and EPA's Indian policies.

 Lack of Resources for Water Quality Programs

The most significant barrier to full implementation of the Indian water quality
programs is the lack of adequate resources necessary for Indian Tribes to develop the
capacity to implement the various water programs  and for EPA to provide Tribes
                                  -  144  -

financial and  technical assistance.   This has  resulted in fragmented  program
implementation.  To date, Tribes are using grant assistance to employ and train staff
and purchase equipment.  Without continuing grant support, they cannot maintain
staffing and/or utilize equipment.  While these activities are critical,  Tribes need
increased long-term funding that can be counted on for program development as well
as EPA technical assistance to undertake activities necessary for program assumption.

Funding Caps or Limitations

CWA sets limits on the use of funds by Indian Tribes for program implementation in
that  Tribes can receive no more  than 1/3 of 1 percent of total appropriations in a
given year for the §319 IMPS Program and 112 of 1 percent set-aside of appropriations
under Title VI for construction of treatment works. These caps limit EPA's ability to
provide grants for Tribal program development and delegate authority to Indian Tribes
to administer water programs.

Match  Requirements

CWA established specific requirements for Indian Tribes to match Federal funds under
certain program grants.  Clean  Lakes  grants and NPS grants require 30 percent and
40 percent matches, respectively. Matching requirements may prevent Tribes with real
needs and statutory responsibility for implementing  environmental programs, from
qualifying for grants. EPA recognizes the economic hardship some Tribes experience.
Match requirements for "needy Tribes" impede EPA's ability to ensure environmental
protection on an equitable basis.

Administrative Burden and Confusion of Multiple Grant Requirements

§518 of CWA presents significant administrative burdens to the Tribes. The  separate
grant programs covered in  §518 (not to mention programs under other environmental
statutes) have  different administrative requirements, time lines, and application
procedures, among others.  Consequently, it has been difficult for EPA and  Tribes to
track the different requirements.  Paperwork requirements and the resources needed
simply to  administer  the various grant programs separately—have also  been
overwhelming for the Tribes.  Most Tribes do not have  the large infrastructure of
State agencies to administer separate programs. As a result. Tribes currently spend
a  significant  part of  their resources on  staffing  and  addressing administrative
requirements  rather  than  developing  regulatory  programs  and  conducting
environmental monitoring.
                                  -  145 -


The CWA should be amended as follows:

>     Provide EPA with authority to establish a comprehensive water grant modeled
      after the recent Indian Environmental General Assistance Act of 1992 (PL 102-
      497 — Section 11), which would allow Tribes to develop "integrated" water
      programs customized to their specific needs.  However, the set-aside from title
      VI appropriations for construction of treatment works should remain a separate
      grant authority under §518  and be  raised to 1 percent. The comprehensive
      water grant authority should:

      o     include either a level-of-effort or a 5 percent match requirement which
            could be waived based on Tribal hardship;
      o     establish a level of up to 5 percent of specific program appropriations for
            an  Indian set-aside; and,
      o     not include any  "Treatment  as a State" requirements  except for  a
            requirement  to  demonstrate   the  capability  to  administer the
            comprehensive grant.  (While  "Treatment as a State"  requirements
            should be deleted for purposes of the comprehensive grant, Indian Tribes
            should  still  be  required  to  demonstrate capability  and appropriate
           jurisdiction to receive authorization to administer the Water Quality
            Standards,  Wetlands, §319  nonpoint sources  and NPDES/Sludge
            Regulatory Programs.)

>•     Remove the one-third of one percent limitation in §518(f) for grants for Indian
      Tribe nonpoint source programs.

>     Provide EPA  with  discretionary  authority to waive  CWA grant eligibility
      requirements as EPA deems appropriate to expedite Tribal assumption of CWA
      programs. This provision would authorize EPA to examine, on a grant program
      basis, and waive  where  appropriate,  provisions that  present unnecessary
      impediments to Tribal assumption of CWA programs.
                                  -  146  -

                        WATER USE EFFICIENCY
Currently  there  is no  legislertive framework for pursuing federal  policy on, or
promoting, water use efficiency.  With a commitment to water use efficiency we
could  add  opportunities  for  more  efficient  resource decisions and achieve
environmental benefits (e.g., avoid construction of overly large municipal wastewater


There is a growing interest on the part of environmental groups, the public, Congress
and the Administration in improved water resource management as a way to achieve
water  quality and quantity goals.  A number  of environmental benefits can be
achieved through water use efficiency, including the reduction of industrial pollutants
through recycling of process water, protection of aquatic habitats because using less
water helps maintain streamflows, and conservation of energy because less water
needs  to  be pumped,  treated, and heated.  Additionally,  the benefits of water
efficiency, both in terms of preventing pollution and of reducing the need for and cost
of water supply and wastewater treatment facilities, can be achieved very cost-

The Administration also recognizes that regional, state, and local differences exist
regarding  water quality, quantity, and usage.  These differences favor  a prudent
approach in which water efficiency programs are tailored for specific locales.

S. 1114 proposes to promote water conservation by coordinating federal policies,
providing  technical assistance to  public agencies, and  establishing a national
information clearinghouse.


To promote efficient water use, the  federal government's primary role should be to
provide technical assistance and information, including the following activities:

>     Foster research and development of new and improved  methods to achieve
      water use efficiency.

>•     Identify, develop, and demonstrate innovative technologies and techniques used
      to achieve water  use efficiency.
                                   -  147  -

Promote integrated resource planning for future water needs that incorporates
demand management, fully addresses surface water and ground water needs
and environmental impacts, and allows participation by all affected parties.

Support  the  establishment of a  national clearinghouse of  information on
efficient  water use.

Provide technical assistance to all water use sectors to evaluate and implement
water efficiency programs.

Advocate beneficial water reuse and wastewater reclamation, especially in the
arid and  semi-arid regions of  the country, consistent with public health and
environmental standards.

Promote  the use of SRF for development and implementation of water use
efficiency activities.
                            -  148  -

                     MARKET-BASED APPROACHES
How should other market-based incentives be encouraged and implemented in the
reauthorized CWA to reduce pollution?


Federal  policy for controlling water pollution for the most part has not relied on
economic incentives. The Administration's proposal for the 1994 reauthorization of
the CWA endorses programs for trading water pollution reduction credits because
such programs can potentially reduce the cost of meeting water quality or loadings
reduction goals.   However, other potentially promising  incentive  approaches,
particularly the use of fertilizer taxes to  reduce agricultural loadings of nitrogen and
phosphorus, are also potential ways of harnessing market incentives to realize cost-
effective pollutant reductions,,


>     EPA should undertake a study of the  feasibility, implementability, and cost-
      effectiveness  of fertilizer taxes, taxes  on the discharge of harmful pollutants,
      and other promising market-oriented incentive approaches in comparison to
      approaches mandated or encouraged by the CWA.

>•     EPA should submit this report, together with recommendations on the future
      use of such incentive approaches, to  Congress and interested  states within
      three years of enactment.
                                 -  149 -

                       BENEFITS AND COSTS OF

How should the CWA provisions be evaluated for their cost effectiveness in achieving
environmental goals?


The CWA has achieved significant improvements in water quality over the last twenty
years.  The reauthorized Act will do even more.

Nevertheless, the solution to these  environmental problems is more difficult today
given the number and  variety of pollutant sources and other conditions that affect
water systems. For example, reduced levels of a fish population in a  river could be
due to a combination of factors including land development in riparian zones, low level
of toxic contaminants from both urban and agricultural runoff, and siltation from urban
development  and agriculture.  Mandated  controls on some or all of these activities
may improve water quality but by an uncertain amount.  This makes it difficult for the
Administration to identify  and quantify  specific future controls that result in a
quantifiable improvement in water resource quality.

In order to improve the  ability of the Administration to evaluate the effect of the
reauthorized Act, to identify and project the affect of future controls on activities on
water quality, and to develop cost-effective approaches for realizing environmental
goals, additional  information collection and analysis methods  will be needed.  For
example, the  Administration will need information to comprehensively assess water
quality in sufficient number of waters over time in order to determine water quality
trends in response to new controls on storm water and combined sewer overflows.

This type of information collection and analysis is not without precedent. Congress
directed EPA  in the Clean Air Act Amendments of 1990, Section 812, to perform a
comprehensive analysis  of the impact of the  1990 amendments with respect to
improvements in air quality.  A similar assessment would be beneficial for the CWA.


*    The Administrator of the EPA,  in  consultation  with  other  agencies,  as
     appropriate,  should conduct a comprehensive analysis of the impact of the
      1994 CWA amendments on the public health, economy, and environment of
     the  United States.  In performing such analysis, the Administrator should
     consider the incremental costs, incremental benefits, and other incremental
     effects associated with various major elements of the reauthorized Act such as

                                  -  150 -

municipal and industrial storm water controls, agricultural runoff controls, etc.
This analysis should also include, to the  extent  practicable, a quantitative
analysis of current (baseline) water quality conditions in U.S. waters to serve
as the launching point for the benefit-cost analysis.  It should also include an
assessment of the reliability of techniques and  existing estimates of the
benefits of water quality improvements.

As part of the effort to improve benefit measurement, the Administrator should
review,  evaluate, and where appropriate,  improve current protocols for the
collection, processing, interpretation and use of data describing water quality
and health and environmental effects related to water quality.  In particular, the
Administrator should seek further to improve the State section 305{b) water
quality inventory reports so as to permit a  more meaningful comparison
between different regions and baselines.  One goal of this effort is to be in a
better position than today to Describe quantitatively the benefits and costs of
this Act and future amendments to this Act as a means of improving the cost-
effectiveness of programs to improve water quality. Another goal of this effort
is to make data available to researchers outside of the government to evaluate
the success of this Act and to help  improve upon  it.

As a companion to the comprehensive inventory of water quality proposed for
section 305(c), EPA should submit a report to Congress that summarizes its
comprehensive analysis, reporting current baseline water quality conditions, the
amount such conditions have changed as a result of the Act and all benefits
and costs (and other effects)  accrued and expected to be accrued as a result
of the Act.  The report should also contain a review and evaluation of the water
quality data used for the analysis  and  plans  for the improvement of data
collection, processing, and modeling protocols; and a review and evaluation of
the methods used to analyze such data and estimate health and environmental
benefits and plans for the improvement of such methods.
                             -  151  -