United States
                             Environmental Protection
                             Off ice of Water
                             Washington, DC 20460
EPA 832-F-00-074
August 2000
Funding Class V Injection  Well Closures with
the Clean Water State Revolving Fund
New EPA  regulations  require closure  of all large-
capacity  cesspools and  many motor vehicle waste
disposal wells by 2007. As many as 8,000 of these Class
V injection wells, often  owned or operated by small
businesses or small  communities, must  be closed or
upgraded.  The Clean Water State Revolving Fund
(CWSRF) can help finance closure or upgrade of Class
V wells.

            Class V Injection Wells

Class V wells are typically shallow disposal systems for
placing  liquid waste  underground.   Large-capacity
cesspools, a type of Class V well, receive sanitary waste
from 20 or more people per day.  They are typically
associated with rural churches and schools, strip malls,
office parks, and housing developments receiving waste
from multiple buildings.  Motor vehicle waste disposal
wells, another type of Class V well, collect fluids from
vehicular repairs or maintenance activities. Class V
wells exist in every state, especially in unsewered areas
where residents are likely to depend on groundwater for
their drinking water.   The Safe  Drinking Water Act
requires regulation of all types of injection wells.
                         Problems Associated with Class V Wells
                         Class V wells can be a significant source of groundwater
                         contamination. These "low-tech" systems perform little
                         or no waste treatment, and the wastes placed in them
                         may be highly toxic.  With 89% of America's  public
                         water systems using groundwater as a drinking water
                         source, Class V injection wells can pose a significant
                         health risk.

                         Class V Wells Rule Requirements
                            New  large-capacity  cesspools  and new  motor
                            vehicle waste disposal wells are banned nationwide
                            as of April 5, 2000.

                            Existing large-capacity cesspools will be phased out
                            nationwide by April 5, 2005.  They must be replaced
                            with an alternative type of treatment.

                            Existing  motor vehicle waste  disposal wells in
                            regulated areas will be phased out  as dictated by
                            states. To determine the regulated areas, states must
                            assess and delineate groundwater protection areas,
                            according to the Safe Drinking Water Act  source
                            water assessment plan guidelines, and must delineate
                            any other sensitive groundwater areas  they deem

                    Septic tank

                                                                  i  i
                                                                         Septic tank

   necessary. Assessments for groundwater protection
   areas must be completed by January 1, 2004, and
   existing motor vehicle waste disposal wells will be
   regulated in these areas one year later. Delineations
   for  other  sensitive  groundwater  areas  must  be
   completed by January 1, 2004.  Owners/operators
   have until  January  1, 2007,  to  meet the rule
   requirements. Exceptions to these requirements:
       States may apply for a one-year extension for
        completing  both  the  assessments  and  the
        delineations, which, if approved, would extend
        the compliance deadline for owners/operators.
       If a state fails  to meet  the deadline or the
        extended  deadline   for   completing  the
        groundwater protection area assessments, the
        rule  applies  statewide, and owners/operators
        have one year to comply.
       If a state fails  to meet  the deadline or the
        extended deadline  for completing the other
        sensitive groundwater area delineations, the rule
        applies statewide, and owners/operators must
        comply by January 1, 2007 (or January 1, 2008,
        if the state received an extension).
       Owners of motor vehicle waste disposal wells
        can apply for a waiver from the ban and obtain
        a  permit.   Permits  require use   of best
        management  practices,  monitoring  of  the
        injectate  and sludge,  and  that  fluids meet
        maximum contaminant levels  at the  point of
       Owners/operators  of  motor  vehicle  waste
        disposal  wells  may receive up to a one-year
        extension if the  most efficient  compliance
        option is connection to  a sanitary  sewer or
        installation of treatment technologies.

   The Clean  Water State Revolving Fund
The CWSRF can ease the financial burden of complying
with the Class V rule.  Each of the 50 states and Puerto
Rico have CWSRF programs which operate like banks.
Federal and state contributions are used to make low- or
no-interest loans for important water quality projects.
Funds are repaid  over terms as long as 20 years. Repaid
funds are  then recycled to fund  other water quality
projects. Nationally, the CWSRF has in excess of $30
billion in assets and funds approximately $3 billion of
water quality projects annually. Over 8,000 loans have
been provided since 1988.

Getting a Project Funded
Class V wells can be a source of nonpoint pollution, and
projects to address these sources are eligible for CWSRF
funding under both the nonpoint source section (319)
and the estuary section (320) of the Clean Water Act.
To obtain CWSRF funding, a project must be identified
in a state's Nonpoint Source Management Plan or in an
estuary's   Comprehensive   Conservation   and
Management Plan.

Viable replacements for large-capacity cesspools include
large-capacity septic  systems with leach fields, sewer
connections,  and small-scale onsite  treatment plants,
many of which have been funded  by the  CWSRF.
Alternatives for motor  vehicle waste  disposal wells
include holding tanks, pretreatment  systems  to  meet
permit  requirements, and  filtering/pretreatment with
connection to sewers.   In  addition,  the CWSRF has
provided   loans  for   underground  storage  tank
remediation, which is similar to replacing or upgrading
motor vehicle waste disposal wells.

Who May Qualify
A variety of entities could be eligible for a CWSRF loan
for nonpoint source  and estuary projects.  Recipients
have   included  community   groups,  individuals,
businesses, municipalities,  conservation districts, and
nonprofit organizations.  CWSRF programs have used a
variety of funding mechanisms, including direct loans
from the CWSRF, loans to municipalities who then lend
to individuals,  and linked-deposit programs that lend
through banks.  Since the  CWSRF is managed by the
states, project funding and eligibilities vary according to
the priorities, policies, and laws of each state.  Contact
your state's CWSRF program for details.

Sources of Repayment
Each state must approve a  source of loan repayment as
part of the application process. Though finding a source
of repayment may prove  challenging,  CWSRF users
have identified many creative repayment sources, which
need not come from the project itself. Some possibilities
  Recreational fees (fishing  licenses, park entrance

    Fees paid by developers on other lands
    Donations made or dues paid to nonprofit groups
    and associations
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Success Stories
The  following descriptions illustrate just some of the
examples of similar projects ongoing in states.

In August 1997, the Ohio EPA created a linked-deposit
program to make low-interest loans available through
participating counties to individual homeowners needing
to upgrade or replace  their home sewage disposal
systems. To receive a CWSRF loan:

  The homeowner obtains  a  county permit which
   specifies  the  proper installation,  operation, and
   maintenance of the onsite system.
  The homeowner takes a certificate to any bank that
   participates in the Linked-Deposit Program.
  Using its own criteria, the lending institution decides
   whether to offer the applicant a loan and at what
   interest rate and term.
  The lending  institution notifies the Ohio  EPA of
    approved loans, and the Agency deposits the loan
    amount in the institution at a reduced interest rate.
   Savings from the reduced interest rate are passed on
    to the loan recipient.

Thus  far,  18 loans in  two counties have  been made
totaling $111,500.  Several more counties in the state are
planning their own programs.

In 1995, Delaware began making CWSRF loans directly
to low- and moderate-income homeowners for septic
system repairs.  The loans of up to $10,000 carry a 3%
interest rate  and have a repayment period of up to 20
years. The state performs a financial capability analysis
on the applicant including a personal credit report.  A
lien is placed on the property to secure the loan. Once
the repairs are made, a Department of Natural Resources
representative inspects the system.  So far the program
has loaned $1.2 million to 158 homeowners.

The state  of Wyoming makes CWSRF loans to the
Leaking Aboveground  & Underground Storage Tank
(LAUST) Remediation  Program.  The program uses the
money to fund all stages of LAUST site cleanup from
initial testing through operation and maintenance. The
state's Mineral Royalty Trust Account provides a 20%
match for these loans.  Since 1990, six loans have been
issued from the CWSRF totaling over $57 million.

Minnesota's Department of Agriculture operates  a
Best Management Practices loan program which  has
funded a variety of water quality projects including
feedlot  upgrades,    manure  storage  and  handling
improvements,  soil erosion  prevention, conservation
tilling equipment,  sewage treatment system repair, and
abandoned well closures. The state issues interest-free
CWSRF  loans  to  counties  and soil   and   water
conservation  districts.  The county  or district, through
banks acting as agents, lends the  money to farmers,
businesses, or landowners at up to 3% interest for a 2- to
10-year  term.     Local  governments   determine
environmental priorities, and the banks determine the
financial feasibility  of the  targeted  projects.   The
counties and districts pay the principal back to the state
within 20 years.  Since the program's inception in 1995,
Minnesota has issued $41 million in loans and  funded
over 2000 projects.

Ch alien ges Ahead
EPA encourages states to use their CWSRF resources to
finance  high-priority water quality projects.  Those
interested  in  obtaining  funding  for  closing  and
upgrading affected Class V wells are encouraged to seek
out their CWSRF programs and apply for funding to
address these water quality projects.

   For more information on the CWSRF, or for a
program representative in your state, please contact:

    The Clean Water State Revolving Fund Branch
       U.S. Environmental Protection Agency
   1200 Pennsylvania Avenue, NW (Mailcode 4204)
             Washington, D.C. 20460
    Phone: (202) 260-7360  Fax: (202) 260-1827
    Internet: http://www.epa.gov/OWM/Fman.htm
For more information on Class V injection wells
               please contact:

     Underground Injection Control Program
   Office of Ground Water and Drinking Water
     U.S. Environmental Protection Agency
   1200 Pennsylvania Avenue (Mailcode 4606)
           Washington, D.C. 20460
            Phone: (202) 260-1993
             Clean Water
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