State Allotment Percentages for the
             Drinking Water State Revolving
             Fund Program
            Federal Register, Volume 70, Number 121
            June 24, 2005
Office of Water (4606M)
EPA816-Z-05-002
www.epa.gov/safewater                 Printed on Recycled Paper
June 2005

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Federal  Register/Vol. 70, No.  121/Friday, June 24, 2005/Notices
                              36583
                ENVIRONMENTAL PROTECTION
                AGENCY
                [FRL-7928-9]

                State Allotment Percentages for the
                Drinking Water State Revolving Fund
                Program
                AGENCY: Environmental Protection
                Agency (EPA).
                ACTION: Notice.

                SUMMARY: The 1996 Safe Drinking Water
                Act (SDWA) Amendments established a
                Drinking Water State Revolving Fund
                (DWSRF) program and authorized $9.6
                billion to be appropriated for the
                program through fiscal year 2003.
                Congress directed that allotments for
                fiscal year 1998 and subsequent years
                would be distributed among States
               •based on the results of the most recent
                Drinking Water Infrastructure Needs
                Survey and Assessment. In this notice,
                the Environmental Protection Agency
                (EPA) is announcing revised DWSRF
                program State allotment percentages in
                accordance with the results from the
                most recent 2003 Drinking Water
                Infrastructure Needs Survey and
                Assessment (Needs Assessment), which
                was released on June 14, 2005. The
                revised State allotment percentages
                affect DWSRF program appropriations
                for fiscal years 2006 through 2009.
                Beginning in fiscal year 1998, EPA
                established a formula that allocates
                funds to the States based directly on
                each State's proportional share of the
                total need for States, provided that each
                State receives a minimum share of one
                percent of the funds available to the
                States, as required by the SDWA. EPA
                has made the determination that it will
                continue to use this method for
                allocating DWSRF program funds. The
                findings from the 2003 Needs
                Assessment will change the percentage
                of the DWSRF program funding received
                by some States in prior years. This
                change reflects an increase or decrease
                in these States' share of the total needs
                for States and will allow appropriations
                disbursements to more accurately reflect
                the needs of the States to reach the
                public health objectives of the SDWA.
                The Agency believes that the 2003
                Needs Survey and Assessment more
                accurately captures needs for necessary
                long-term rehabilitation and
                replacement of deteriorating
infrastructure that were under-reported
in the earlier surveys.
DATES: This notice is effective June 24,
2005.
FOR FURTHER INFORMATION CONTACT: For
technical inquiries, contact Jeff
McPherson, Drinking Water Protection
Division, Office of Ground Water and
Drinking Water (4606M), Environmental
Protection Agency, 1200 Pennsylvania
Ave., NW., Washington, DC 20460;
telephone number: (202) 564-6878; fax
number: (202) 564-3757; e-mail address:
mcpheTSon.jeffrey@epa.gov. Copies of
this document and information on the
Drinking Water Infrastructure Needs
Survey and Assessment and the DWSRF
program can be found on EPA's Office
of Ground Water and Drinking Water
Web site at http://mvw.epa.gov/
safeivater/.
SUPPLEMENTARY INFORMATION: The 1996
Safe Drinking Water Act (SDWA)
Amendments established a Drinking
Water State Revolving Fund (DWSRF)
program and authorized $9.6 billion to
be appropriated for the program through
fiscal year 2003. Through federal fiscal
year 2005, Congress has appropriated
$7.8 billion for the DWSRF program.
Congress directed that allotments for
fiscal year 1998 and subsequent years be
distributed among States based on the
results of the most recent Drinking
Water Infrastructure Needs Survey and
Assessment (SDWA section
1452(a)(l)(D)(ii)), which must be
conducted every four years. The  first
survey, which reflected 1995 data, was
released in February 1997 and the
second survey, which reflected 1999
data, was released in February 2001.
The 2003 Drinking Water Infrastructure
Needs Survey and Assessment, which
was conducted over the last two years,
was released on June 14, 2005 (EPA
816-R-05-001). The survey and
assessment was completed in
cooperation with the States. The States
participated in both the design and
development of the survey. The survey
examined the needs of water systems
and used these data to extrapolate needs
to each State. The survey included all of
the nation's 1,342 largest systems (those
serving over 40,000 people)  and a
statistical sample of 2,553 systems
serving 3,301—40,000 people. For the
1999 Needs Assessment, EPA conducted
site visits to approximately 600 small
community water systems and 100 not-
for-profit noncommunity water systems.
The EPA believes that the needs
captured from the site visits in 1999  •  .
represented a fair and complete
assessment of these systems' 20-year
needs.  Findings from 1999 were very
similar to the findings in 1995,

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36584
Federal Register/Vol.  70,  No. 121/Friday, June 24, 2005/^011065
indicating that the systems needs did
not change significantly over a four-year
period. Therefore, EPA decided it could
estimate the 2003 needs for small
community water systems and not-for-
profit noncommunity water systems by
adjusting the 1999 needs to 2003
dollars.
  The sample design for the survey
produces a statistically valid State-by-
State estimate of need. The 2003 Needs
Assessment  presents State-by-State
needs in several ways. For each State,
the Needs Assessment provides a
bottom-line  estimate of the total need,
which reflects the capital costs for all
drinking water infrastructure projects
                allowed for inclusion in the Survey. The
                Needs Assessment also presents capital
                needs for each State by system size, by
                category of need (i.e., treatment,
                distribution and transmission, storage,
                source, and "other"), by existing SDWA
                regulation, and by current and future
                need. Current needs are projects that a
                system considers a high priority for
                near-term implementation to enable a
                water system to continue to deliver safe
                drinking water. The Needs Assessment
                also allocated the $0.9 billion need for
                the recently promulgated Arsenic Rule.
                The EPA used the total national cost for
                the Arsenic Rule from the Economic
                Analysis to allocate the Rule's
implementation cost to each State based
on the occurrence data for the number
of systems with arsenic over 10 ppb.
  The 2003 Needs Assessment found
that the total national need is $270.8
billion (Table 1). This  estimate
represents the needs of the
approximately 53,000  community water
systems and 21,400 not-for-profit
noncommunity water systems that are
eligible to receive DWSRF program
assistance. These systems are found in
all 50 States, the District of Columbia,
Puerto Rico, on American Indian lands
and in Alaska Native Villages, and the
Virgin Island and Pacific Island
territories.
        TABLE 1.—2003 DRINKING WATER INFRASTRUCTURE NEEDS SURVEY AND ASSESSMENT 20-YEAR NEEDS
                                              Type of need
                                                                                     Need
                                                                                   (billions)
States 	
Territories	
American Indian and Alaska Native Villages 	
Costs for Proposed and Recent Regulations (does not include the recently promulgated Arsenic Rule)
                                                                                      $263.8
                                                                                         0.6
                                                                                         2.4
                                                                                         9.9
    Total National Need .
                                                                                      $276.8
  Note: Numbers may not total due to rounding.
  The total national need also includes
$9.9 billion in capital needs associated
with recently promulgated (excluding
the Arsenic Rule) and future
regulations, as identified in EPA
Economic Analyses accompanying the
rules. Although these needs are
included in the total national need, they
were not apportioned to the States based
upon the unanimous recommendation
of the State representatives who
participated in the survey design. The
States expressed concern that the
methods available for allocating the
costs of these regulations would not
represent the true costs of compliance
on a State level. The total State need,
which is the figure that EPA will use to
calculate the State allotments, includes
only the needs of the 50 States, the
District  of Columbia, and Puerto Rico.
The 2003 Needs Assessment estimates
that the total State need is $263.8
billion.

Allocation Method

  On October 31,1996, EPA solicited
public comment on six options for using
the results of the first Drinking Water
Infrastructure Needs Survey and
Assessment to allocate DWSRF program
funds to the States (61 FR 56231). On
March' 18,1997, EPA announced its
decision to allocate DWSRF program
funds for fiscal years 1998 through 2001
appropriations based on each State's
proportional share of the total eligible
                needs for the States as derived from the
                1995 Needs Assessment (62 FR 12900).
                EPA used this same method when
                allocating DWSRF program funds for
                fiscal years 2002 through 2005, utilizing
                the results of the 1999 Needs
                Assessment. EPA has made the
                determination that it will continue to
                use this method for allocating DWSRF
                program funds for fiscal years 2006
                through 2009 appropriations, utilizing
                the results of the 2003 Needs
                Assessment. The funds available to the
                States will be the level of funds
                appropriated by Congress, less the
                national set-asides, which includes an
                allocation for American Indian and
                Alaska Native Village water systems. Of
                the funds available to States, the SDWA
                includes  specific allocations for the
                Pacific Islands, the Virgin Islands, and
                the District of Columbia. Each State will
                receive an allotment of DWSRF program
                funds based  on each State's proportional
                share of the total State need ($263.8
                billion), provided that each State
                receives a minimum allocation of one
                percent of the funds available to States,
                as required by the SDWA.
                  The 2003 Needs Assessment found
                that 22 States, Puerto Rico, and the
                District of Columbia each had less than
                one percent  of the total national need
                (in aggregate, 8 percent of the total
                national need); however, for 2006 to
                2009,  each of these States will be
                eligible for one percent of the annual
DWSRF funds made available to states
(or, in aggregate, 24 percent of the total
DWSRF funds made available to states).
The discrepancy between these States'
allocations percentages and their
proportional needs as identified in the
2003 Assessment may be due, in part, to
a number of these States participating in
the needs assessment effort to a lesser
degree than the other States.
  The total State need includes all
documented projects collected by the
Needs Assessment. In general, a project
was included in the Needs Assessment
if project documentation demonstrated
that meeting the need would address the
public health objectives of the SDWA.
The total State need includes both
projects that are currently needed and
future projects that will be needed over
the next 20 years in four general
categories: treatment, source, storage,
and transmission and distribution. The
formula based on the total need makes
no distinction between  the four
categories—that is, it assigns an equal
weight to all categories  of need. Also,
projects to correct immediate public
health threats (e.g., replacing a
deteriorated filter plant) are given the
same weight as less critical needs (e.g.,
replacing a storage tank that is expected
to reach the end of its useful life in five
years). With the exception of the
Arsenic Rule, capital costs associated
with recently promulgated and future
regulations were included in the total

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                        Federal  Register/Vol. 70, No.  121/Friday, June 24, 2005/Notices
                                                                       36585
national need but not distributed to
individual states. Costs associated with
the Arsenic Rule were allocated to each
State based on occurrence data. The
Needs Assessment excluded capital
projects that are ineligible for DWSRF
program assistance, such as dams,
reservoirs and projects needed solely for
growth.

Allocation of Funds
  Table 2 contains each State's expected
DWSRF program allotment based on an
appropriation of $850,000,000 and
national set-aside assumptions. The
appropriation amount is based on the
President's budget request of
$850,000,000 for fiscal year 2006. The
national set-asides for fiscal year 2006
include funds for American Indian and
Alaska Native Village water systems  at
the level of 1.5 percent of the total
appropriation. (SDWA Section 1452(i)).
The amount will be $12,750,000 for
Indian Tribes and Alaska Native
Villages if funds are appropriated at the
level of the President's 2006 budget
request. Additional national set-asides
for fiscal year 2006 include $2,000,000
for monitoring for unregulated
contaminants. If funds are appropriated
for the DWSRF program at the level of
$850,000,000 and if the anticipated
national set-asides do not change, the
total funds available to the States, the
District of Columbia, and Territories
would equal $835,250,000. Because the
percentages are based on the total funds
available for allotment to the States,
they can be used for general planning
purposes for future years. Once the
appropriated amount and national set-
asides are known, a State's allotment
can be estimated by subtracting the
national set-asides from the total funds
available for allotment and then
applying the appropriate percentage
shown below. EPA will annually notify
each State of their allotment from a
specific fiscal year's appropriation after
the final budget has been passed.
  The findings from the 2003 Needs
Assessment will change the individual
allotment percentage of the DWSRF
program funds received by some States
when compared to their current
allotment percentage. This change
reflects an increase or decrease in these
States' proportion of the total State
need. The variation in needs occurred
principally as a result of the data
submitted by individual water systems,
but also in part due to refinements in
the survey methods. With the collection
of data from nearly 4,000 water systems
and over 128,600 projects submitted, a
change in some States' allotments
represents an inevitable consequence of
conducting a survey of this scale.
                  TABLE 2.—DISTRIBUTION OF DRINKING WATER STATE REVOLVING FUND ALLOTMENTS
                                            State
                                                                                                Percent
                                                                    Amount
                                                                    allotted
Alabama	
Alaska 	
Arizona	
Arkansas	
California	
Colorado 	
Connecticut	
Delaware	
Florida 	
Georgia 	
Hawaii 	
Idaho	
Illinois 	
Indiana 	
Iowa 	
Kansas 	
Kentucky 	
Louisiana	
Maine 	
Maryland 	
Massachusetts ..
Michigan	
Minnesota 	
Mississippi	
Missouri	
Montana	
Nebraska	
Nevada 	
New Hampshire
New Jersey	
New Mexico 	
New York 	
North Carolina ...
North Dakota	
Ohio 	
Oklahoma	
Oregon 	
Pennsylvania	
Puerto Rico 	
Rhode Island	
South Carolina ..
South Dakota ....
Tennessee 	
Texas 	
Utah 	
                                                            1.00
                                                            1.00
                                                            2.84
                                                            1.26
                                                            8.15
                                                            1.76
                                                            1.00
                                                            1.00
                                                            4.52
                                                            2.81
                                                            1.00
                                                            1.00
                                                            4.08
                                                            1.40
                                                            1.25
                                                            1.00
                                                            1.05
                                                            1.42
                                                            1.00
                                                            1.38
                                                            2.68
                                                            3.46
                                                            1.80
                                                            1.00
                                                            1.94
                                                            1.00
                                                            1.00
                                                            1.00
                                                            1.00
                                                            2.21
                                                            1.00
                                                            4.45
                                                            3.37
                                                            1.00
                                                            3.00
                                                            1.61
                                                            1.46
                                                            3.37
                                                            1.00
                                                            1.00
                                                            1.00
                                                            1.00
                                                            1.04
                                                            8.24
                                                            1.00
                             $8,352,500
                              8,352,500
                             23,704,100
                             10,487,900
                             68,108,400
                             14,714,300
                              8,352,500
                              8,352,500
                             37,724,800
                             23,461,900
                              8,352,500
                              8,352,500
                             34,068,800
                             11,655,600
                             10,405,500
                              8,352,500
                              8,759,400
                             11,833,100
                              8,352,500
                             11,493,200
                             22,365,800
                             28,893,000
                             15,038,600
                              8,352,500
                             16,217,400
                              8,352,500
                              8,352,500
                              8,352,500
                              8,352,500
                             18,484,300
                              8,352,500
                             37,184,400
                             28,109,400
                              8,352,500
                             25,040,200
                             13,484,400
                             12,213,900
                              28,133,00
                              8,352,500
                              8,352.500
                              8,352,500
                              8,352,500
                              8,668,600
                             68,814,200
                              8,352,500

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36586
Federal Register/Vol. 70, No.  121/Friday, June 24, 2005/Notices
          TABLE 2.—DISTRIBUTION OF DRINKING WATER STATE REVOLVING FUND ALLOTMENTS—Continued
State
Vermont 	 	
Virginia . 	
Washington 	
West Virginia 	 	 	 	
Wisconsin 	 	
Wyoming 	
District of Columbia 	
Other Areas * 	

Total 	

Percent
1 00
1.06
2.14
1 00
1.94
1.00
1.00
0.33

100.00

Amount
allotted
8 352 500
8 892 600
17906900
8 352 500
16 169700
8 352 500
8 352 500
2 756 300

835 250 000

  Dated: June 17, 2005.
Benjamin II. Grumbles,
Assistant Administrator, Office of Water.
[FR Doc. 05-12660 Filed 6-23-05; 8:45 am]
BILLING CODE 6560-50-P

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