2000
<PRE>[DOCID: f:h1178ih.txt]






107th CONGRESS
  1st Session
                                H. R. 1178

To amend the Safe Drinking Water Act to provide grants to small public 
                        drinking water systems.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 22, 2001

 Mr. Gibbons (for himself and Mr. Udall of New Mexico) introduced the 
   following bill; which was referred to the Committee on Energy and 
                                Commerce

_______________________________________________________________________

                                 A BILL


 
To amend the Safe Drinking Water Act to provide grants to small public 
                        drinking water systems.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Community Drinking Water 
Funding Act''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds that--
            (1) in some cases, drinking water standards in effect and 
        proposed as of the date of enactment of this Act can place 
        large financial burdens on public water systems, especially 
        systems that serve fewer than a few thousand people;
            (2) some small public water systems have experienced water 
        contamination problems that may pose a significant risk to the 
        health of water consumers;
            (3) small communities are concerned about improving 
        drinking water quality;
            (4) the limited scientific, technical, and professional 
        resources of many small communities make understanding and 
        implementing regulatory requirements very difficult;
            (5) small communities often struggle to meet water quality 
        standards because of difficulty in securing funding;
            (6) small communities often lack a tax base or 
        opportunities to benefit from economics of scale and therefore 
        face very high per capita costs in improving drinking water 
        quality;
            (7) the smallest public water systems, which serve fewer 
        than 3,300 people, represent 85 percent of all public water 
        systems;
            (8) small public water systems serving fewer than 10,000 
        people represent 94 percent of all public water systems;
            (9) small communities would benefit from a grant program 
        designed to provide funding for water quality projects without 
        a substantial matching requirement; and
            (10) Federal programs in effect as of the date of enactment 
        of this Act do not adequately meet the needs of small 
        communities with respect to public water systems.
    (b) Purpose.--The purpose of this Act is to establish a program to 
provide grants to small public water systems to--
            (1) meet applicable national primary drinking water 
        regulations under the Safe Drinking Water Act (42 U.S.C. 300f 
        et seq.);
            (2) maintain water costs at a reasonable level for the 
        communities served by small public water systems; and
            (3) obtain technical assistance to develop the capacity to 
        sustain operations over the long term.

SEC. 3. SMALL PUBLIC WATER SYSTEM ASSISTANCE PROGRAM.

    (a) Definition of Indian Tribe.--Section 1401(14) of the Safe 
Drinking Water Act (42 U.S.C. 300f(14)) is amended in the second 
sentence by striking ``1452,'' and inserting ``1452 and part G,''.
    (b) Establishment of Program.--The Safe Drinking Water Act (42 
U.S.C. 300f et seq.) is amended by adding at the end the following:

             ``PART G--SMALL PUBLIC WATER SYSTEM ASSISTANCE

``SEC. 1471. DEFINITIONS.

    ``In this part:
            ``(1) Eligible activity.--
                    ``(A) In general.--The term `eligible activity' 
                means an activity concerning a small public water 
                system (including obtaining technical assistance) that 
                is carried out by an eligible entity for a purpose 
                consistent with section 1473(c)(1) or 1474(c)(1), as 
                appropriate.
                    ``(B) Exclusion.--The term `eligible activity' does 
                not include any activity to increase the population 
                served by a small public water system, except to the 
                extent that the State under section 1473(b)(1) or the 
                Administrator under section 1474(b)(1) determines an 
                activity to be necessary to--
                            ``(i) achieve compliance with a national 
                        primary drinking water regulation; and
                            ``(ii) provide a water supply to a 
                        population that, as of the date of enactment of 
                        this part, is not served by a safe public water 
                        system.
            ``(2) Eligible entity.--The term `eligible entity' means a 
        small public water system that--
                    ``(A) is located in a State or an area governed by 
                an Indian Tribe; and
                    ``(B)(i) if located in a State, serves a community 
                that, under affordability criteria established by the 
                State under section 1452(d)(3), is determined by the 
                State to be--
                            ``(I) a disadvantaged community; or
                            ``(II) a community the State expects to 
                        become a disadvantaged community as a result of 
                        carrying out an eligible activity; or
                    ``(ii) if located in an area governed by an Indian 
                Tribe, serves a community that is determined by the 
                Administrator, under criteria published by the 
                Administrator under section 1452(d)(3) and in 
                consultation with the Secretary, to be--
                            ``(I) a disadvantaged community; or
                            ``(II) a community the Administrator 
                        expects to become a disadvantaged community as 
                        a result of carrying out an eligible activity.
            ``(3) Eligible state.--The term `eligible State' means a 
        State that has--
                    ``(A) adopted, and is implementing, an approved 
                operator certification program under section 1419; and
                    ``(B) established affordability criteria under 
                section 1452(d)(3) for use in identifying disadvantaged 
                communities.
            ``(4) Program.--The term `Program' means the Small Public 
        Water System Assistance Program established under section 
        1472(a).
            ``(5) Secretary.--The term `Secretary' means the Secretary 
        of Health and Human Services, acting through the Director of 
        the Indian Health Service.
            ``(6) Small public water system.--The term `small public 
        water system' means a public water system (including a 
        community water system and a noncommunity water system) that 
        serves a population of 10,000 or fewer.

``SEC. 1472. SMALL PUBLIC WATER SYSTEM ASSISTANCE PROGRAM.

    ``(a) Establishment.--Not later than July 1, 2002, the 
Administrator shall establish within the Environmental Protection 
Agency a Small Public Water System Assistance Program.
    ``(b) Duties.--The head of the Program shall--
            ``(1) in accordance with section 1474, establish and 
        administer a small public water system assistance program for, 
        and provide grants to, eligible entities located in areas 
        governed by Indian Tribes, for use in carrying out eligible 
        activities;
            ``(2) identify, and prepare annual prioritized lists of, 
        activities for eligible entities located in areas governed by 
        Indian Tribes that are eligible 
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for grants under section 1474;
            ``(3) provide funds to States for use in establishing small 
        public water system assistance programs under section 1473 that 
        award grants to eligible entities to carry out eligible 
        activities; and
            ``(4) prepare, and submit to the Administrator, the reports 
        required under subsection (d).
    ``(c) Allocation of Funds.--
            ``(1) States.--
                    ``(A) In general.--Subject to subparagraphs (B) 
                through (D) and paragraph (2)(A), for each fiscal year, 
                the Administrator, through the head of the Program, 
                using the most recent available needs survey conducted 
                by the Administrator under section 1452(h), shall 
                allocate the funds made available to carry out the 
                Program for the fiscal year among eligible States based 
                on the ratio that--
                            ``(i) the financial need associated with 
                        treatment projects for small public water 
                        systems in the State; bears to
                            ``(ii) the total financial need associated 
                        with treatment projects for all small public 
                        water systems in all States.
                    ``(B) Additional requirements.--Any additional 
                financial needs of small public water systems 
                associated with the cost of treatment projects needed 
                to comply with a national primary drinking water 
                regulation (including a regulation concerning arsenic) 
                that is promulgated after the most recent needs survey 
                conducted under section 1452(h) shall be factored into 
                the determination of financial need under clauses (i) 
                and (ii) of subparagraph (A) for each fiscal year.
                    ``(C) Minimum allocation.--An allocation of funds 
                to a State for a fiscal year under subparagraph (A), 
                taking into consideration any additional financial 
                needs described in subparagraph (B), shall be in an 
                amount that is at least 1 percent of the amount of 
                funds available for that fiscal year.
                    ``(D) Redistribution if nonuse.--If a State does 
                not qualify for, or fails to request, funds allocated 
                to the State under subparagraph (A) in any fiscal year, 
                the Administrator shall redistribute the funds among 
                the States that--
                            ``(i) request funds for that fiscal year; 
                        and
                            ``(ii) are eligible to receive the funds 
                        under subparagraph (A) for that fiscal year.
            ``(2) Indian tribes.--
                    ``(A) In general.--For each fiscal year, in 
                accordance with subparagraph (B), 3 percent of the 
                total amount of funds made available to carry out the 
                Program for the fiscal year shall be allocated by the 
                Administrator to provide grants to eligible entities 
                that are located in areas governed by Indian Tribes 
                through the program established under section 1474(a).
                    ``(B) Use of funds.--
                            ``(i) In general.--For each fiscal year, 
                        the Administrator shall award not less than 1.5 
                        percent of the funds allocated under 
                        subparagraph (A) to nonprofit technical 
                        assistance organizations, to be used for the 
                        purposes of--
                                    ``(I) assisting the Administrator 
                                in preparing the list required under 
                                section 1474(b) (including assisting 
                                the Administrator in identifying the 
                                highest priority eligible activities 
                                for eligible entities located in areas 
                                governed by Indian Tribes for which a 
                                grant under section 1474 may be used);
                                    ``(II) assisting eligible entities 
                                located in areas governed by Indian 
                                Tribes in--
                                            ``(aa) assessing needs 
                                        relating to eligible 
                                        activities; and
                                            ``(bb) identifying 
                                        available sources of funding to 
                                        meet the cost-sharing 
requirement of section 1474(f)(1); and
                                    ``(III) assisting eligible entities 
                                located in areas governed by Indian 
                                Tribes that receive funding under 
                                section 1474 in--
                                            ``(aa) planning, 
                                        implementing, and maintaining 
                                        eligible activities that are 
                                        funded under that section; and
                                            ``(bb) preparing reports 
                                        required under section 1474(h).
                            ``(ii) Consultation.--Each nonprofit 
                        technical assistance organization that receives 
                        funds under clause (i) shall consult with the 
                        Administrator, through the head of the program, 
                        before carrying out any activity for the 
                        purposes described in subclauses (II)(aa) and 
                        (III)(aa) of that clause.
                            ``(iii) No funds for lobbying expenses.--
                        None of the funds made available to a nonprofit 
                        technical assistance organization under clause 
                        (i) shall be used to pay lobbying expenses.
            ``(3) Program.--For each fiscal year, the Administrator may 
        use not more than 0.1 percent of the funds made available to 
        carry out the Program to pay reasonable costs incurred in the 
        administration of the Program.
    ``(d) Reports.--Not later than January 1, 2003, and annually 
thereafter through January 1, 2007, the Administrator shall--
            ``(1) submit, to the Committee on Energy and Commerce of 
        the House of Representatives and the Committee on Environment 
        and Public Works of the Senate, a report that, for the 
        preceding fiscal year--
                    ``(A) lists the eligible activities for eligible 
                entities, as prepared under sections 1473(b)(1) and 
                1474(b)(1), located in areas governed by Indian Tribes 
                and in each State receiving funds under this part;
                    ``(B) identifies the number of grants awarded by 
                each State, and by the Administrator to eligible 
                entities located in areas governed by Indian Tribes, 
                under this part;
                    ``(C) identifies each eligible entity that received 
                a grant to carry out an eligible activity;
                    ``(D) identifies the amount of each grant provided 
                to an eligible entity to carry out an eligible 
                activity; and
                    ``(E) describes each eligible activity funded by 
                such a grant (including the status of the eligible 
                activity); and
            ``(2) make the report under paragraph (1) available to the 
        public.

``SEC. 1473. STATE SMALL PU
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BLIC WATER SYSTEM ASSISTANCE PROGRAMS.

    ``(a) In General.--To be eligible to receive funding under this 
part, a State shall--
            ``(1) be an eligible State;
            ``(2) not later than July 1, 2002 (if funding is sought for 
        fiscal year 2002) or not later than September 30 of any of 
        fiscal years 2002 through 2005 (if funding is sought for the 
        following fiscal year), establish a small public water system 
        assistance program--
                    ``(A) under which the requirements of subsection 
                (b), oversight, and related activities (other than 
                financial administration) with respect to the program 
                are administered--
                            ``(i) in the case of a State that is 
                        exercising primary enforcement responsibility 
                        for public water systems, by the State agency 
                        having primary responsibility for 
                        administration of the State program under 
                        section 1413; and
                            ``(ii) in the case of a State that is not 
                        exercising primary enforcement authority for 
                        public water systems, by a State agency 
                        selected by the Governor of the State; and
                    ``(B) that meets the requirements of this section; 
                and
            ``(3) for each fiscal year for which funding is sought 
        under this section--
                    ``(A) in preparing an intended use plan under 
                section 1452(b), after providing for public review and 
                comment, prepare an annual list of eligible activities 
                for eligible entities in the State in accordance with 
                subsection (b); and
                    ``(B) prepare and submit to the Administrator a 
                request for the funding, by such date and in such form 
                as the Administrator shall prescribe.
    ``(b) Program Priority Requirement.--
            ``(1) List of eligible activities.--A small public water 
        system assistance program established under subsection (a) 
        shall, for each fiscal year for which funding is sought, 
        identify, and, using the priority criteria described in 
        paragraph (2) and considering the additional criteria described 
        in paragraph (3), list in descending order of priority, 
        eligible activities for eligible entities in the State for 
        which funds provided from a grant under this part may be used.
            ``(2) Priority criteria.--In preparing the list under 
        paragraph (1), a small public water system assistance program 
        shall give priority for the use of grants to eligible 
        activities that--
                    ``(A) address the most serious risk to human 
                health;
                    ``(B) are necessary to ensure compliance with 
                national primary water regulations applicable to 
                eligible entities under section 1412; and
                    ``(C) assist systems most in need, as calculated on 
                the basis of median household income, under 
                affordability criteria established by the State under 
                section 1452(d)(3).
            ``(3) Additional criteria.--In addition to the priority 
        criteria described in paragraph (2), a small public water 
        system assistance program shall, in preparing a list under 
paragraph (1), consider giving additional priority to any listed 
eligible activities that are to be carried out by communities that form 
management cooperatives (including management cooperatives between 
systems that do not have connections).
    ``(c) Use of Funds.--Using any funds received by a State under this 
section for a fiscal year, in accordance with the list prepared under 
subsection (b), a small public water system assistance program 
established by the State under subsection (a)--
            ``(1) shall provide to an eligible entity, on a cost-shared 
        basis, a grant to be used for an eligible activity (including 
        source water protection) the purpose of which is compliance 
        with national primary drinking water regulations applicable to 
        the eligible entity under section 1412;
            ``(2) shall--
                    ``(A) award not less than 1.5 percent of the funds 
                to nonprofit technical assistance organizations to be 
                used for the purposes of--
                            ``(i) assisting the State in preparing the 
                        list required under subsection (b) (including 
                        assisting the State in identifying the highest 
                        priority eligible activities for eligible 
                        entities located in the State for which a grant 
                        under this section may be used); and
                            ``(ii) assisting eligible entities in--
                                    ``(I) assessing needs relating to 
                                eligible activities;
                                    ``(II) identifying available 
                                sources of funding to meet the cost-
                                sharing requirement of subsection (f); 
                                and
                                    ``(III) planning, implementing, and 
                                maintaining any eligible activities of 
                                the eligible entities that receive 
                                funding under this section;
                    ``(B) require each nonprofit technical assistance 
                organization that receives funds under subparagraph (A) 
                to consult with the State, through the head of the 
                small public water assistance program, before carrying 
                out any activity for the purposes described in 
                subclauses (I) and (III) of subparagraph (A)(ii); and
                    ``(C) require that none of the funds made available 
                to a nonprofit technical assistance organization under 
                subparagraph (A) be used to pay lobbying expenses; and
            ``(3) may use not to exceed 1 percent of the funds 
        allocated to the State to pay reasonable costs incurred in the 
        administration of the small public water system assistance 
        program.
    ``(d) Limitation on Use of Funds.--For each fiscal year, not more 
than 5 percent of the funds received by an eligible entity under this 
section may be used to obtain technical assistance in planning, 
implementing, and maintaining eligible activities that are funded under 
this section.
    ``(e) Limitation on Receipt of Funds.--
            ``(1) In general.--Except as provided in paragraph (2), a 
        grant under this section shall not be provided to an eligible 
        entity that, as determined by the State--
                    ``(A) does not have the technical, managerial, and 
                financial capability to ensure compliance with national 
                primary drinking water regulations applicable to the 
                eligible entity under section 1412; or
                    ``(B) is in significant noncompliance with any 
                applicable national primary drinking water regulation.
            ``(2) Exception for receipt of grant.--An eligible entity 
        described in paragraph (1) may receive a grant under this 
        section only--
                    ``(A) if the State determines that use of the grant 
                will ensure compliance with national primary drinking 
                water regulations applicable to the eligible entity 
                under section 1412;
                    ``(B)(i) to restructure or consolidate the facility 
                to achieve compliance with applicable national primary 
                drinking water regulations; or
       
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             ``(ii) in a case in which restructuring or 
                consolidation of the facility is not practicable, if 
                the State determines that--
                            ``(I) the eligible entity has made a good 
                        faith effort to achieve compliance with 
                        applicable national primary drinking water 
                        regulations; and
                            ``(II) the eligible entity is adhering to 
                        an enforceable schedule for achieving those 
                        regulations; and
                    ``(C) in a case in which paragraph (1)(A) applies 
                to an eligible entity, and the eligible entity agrees 
                to undertake feasible and appropriate changes in 
                operations (including changes in ownership, management, 
                accounting, rates, maintenance, consolidation, 
provision of an alternative water supply, or other procedures), if the 
State determines that the measures are necessary to ensure that the 
eligible entity has the technical, managerial, and financial capability 
to comply with applicable national primary drinking water regulations 
over the long term.
            ``(3) Review.--Before providing assistance under this 
        section to an eligible entity that is in significant 
        noncompliance with any national primary drinking water 
        regulation applicable to the eligible entity under section 
        1412, the State shall conduct a review to determine whether 
        paragraph (1)(A) applies to the entity.
    ``(f) Cost Sharing.--
            ``(1) In general.--
                    ``(A) Limit.--Except as provided in paragraph (2), 
                the share of the total cost of an eligible activity 
                funded by a grant under this section shall not exceed 
                80 percent.
                    ``(B) Use of other federal funds.--To pay the 
                portion of an eligible activity that may not be funded 
                by a grant under this section, an eligible entity may 
                use Federal financial assistance other than assistance 
                received under this section.
            ``(2) Waiver of cost-sharing requirement.--
                    ``(A) In general.--Subject to subparagraph (B), a 
                State may waive the requirement of an eligible entity 
                to pay all or a portion of the share of an eligible 
                activity that may not be funded by a grant under this 
                section, based on a determination by the State that the 
                eligible entity is unable to pay any or all of the 
                share.
                    ``(B) Limitation.--For each fiscal year in which a 
                State receives funding under this section, the total 
                amount of cost-share waivers provided by the State 
                under subparagraph (A) shall not exceed 30 percent of 
                the amount of funding received by the State for the 
                fiscal year under section 1472(c)(1).
    ``(g) Unobligated Funds.--Any funds not obligated by the State for 
a purpose consistent with subsection (c) within 1 year after the date 
of the allocation of the funds by the Administrator under section 
1472(c) shall be returned to the Administrator for reallocation under 
that section.
    ``(h) Reports.--Not later than November 1 following each fiscal 
year in which a State receives funding under this section, the State 
shall--
            ``(1) submit to the Administrator a report that, for the 
        preceding fiscal year--
                    ``(A) lists the eligible activities for eligible 
                entities, as prepared under subsection (b);
                    ``(B) identifies the number of grants awarded by 
                the State small public water system assistance program 
                to eligible entities;
                    ``(C) identifies each eligible entity that received 
                a grant to carry out an eligible activity;
                    ``(D) identifies the amount of each grant provided 
                to an eligible entity to carry out an eligible 
                activity; and
                    ``(E) describes each eligible activity funded by 
                such grants (including the status of the eligible 
                activity); and
            ``(2) make the report under paragraph (1) available to the 
        public.

``SEC. 1474. SMALL PUBLIC WATER SYSTEM ASSISTANCE PROGRAM FOR INDIAN 
              TRIBES.

    ``(a) Establishment.--Not later than July 1, 2002, the 
Administrator shall establish a small public water system assistance 
program for Indian Tribes, through which eligible entities located in 
areas governed by the Indian Tribe may receive grants for eligible 
activities under this part.
    ``(b) Program Priority Requirement.--
            ``(1) List of eligible activities.--
                    ``(A) In general.--The Administrator, acting 
                through the head of the small public water system 
                assistance program for Indian Tribes, in consultation 
                with the Secretary, shall, for each fiscal year, 
                identify, and, using the priority criteria described in 
                paragraph (2) and considering the additional criteria 
                described in paragraph (3), list in descending order of 
                priority, eligible activities for eligible entities 
                located in areas governed by Indian Tribes for which 
                funds provided from a grant under this part may be 
                used.
                    ``(B) Coordination.--
                            ``(i) In general.--To the maximum extent 
                        practicable, the Administrator shall ensure 
                        that the list under subparagraph (A) is 
                        coordinated with any needs assessment conducted 
                        under section 1452(i)(4).
                            ``(ii) Additional consideration.--Any 
                        additional financial needs of small public 
water systems located in areas governed by Indian Tribes that are 
associated with the cost of complying with a national primary drinking 
water regulation (including a regulation concerning arsenic) that is 
promulgated after the most recent needs survey conducted under section 
1452(i)(4) shall be factored into the determination of financial need 
for, and prioritization of, eligible activities under this section.
            ``(2) Priority criteria.--In preparing the list under 
        paragraph (1), the Administrator shall give priority for the 
        use of grants to eligible activities that--
                    ``(A) address the most serious risk to human 
                health;
                    ``(B) are necessary to ensure compliance with 
                national primary water regulations applicable to 
                eligible entities under section 1412; and
                    ``(C) assist systems most in need, as calculated on 
                the basis of median household income, under 
                affordability criteria published by the Administrator 
                under section 1452(d)(3).
            ``(3) Additional criteria.--In addition to the priority 
        criteria described in paragraph (2), the Administrator shall, 
        in preparing a list under paragraph (1), consider giving 
        additional priority to any listed eligible activities that are 
        to be carried out by communities that form management 
        cooperatives (including management cooperatives between systems 
        that do not have connections).
    ``(c) Use of Funds.--
            ``(1) In general.--Using funds allocated under section 
        1472(c)(2)(A), the small public water system assistance program 
        established under subsection (a) shall provide to an eligible 
        entity located in an area governed by an Indian Tribe, on a 
        cost-shared basis, a 
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grant to be used for an eligible activity 
        (including source water protection) the purpose of which is 
        compliance with national primary drinking water regulations 
        applicable to the eligible entity under section 1412.
            ``(2) Allocation of grant funding.--For each fiscal year, 
        taking into consideration the funding allocation under section 
        1472(c)(2)(A) for the fiscal year, the head of the small public 
        water assistance program established under subsection (a), in 
        consultation with the Secretary, shall provide grants under 
        paragraph (1) for the maximum number of eligible activities for 
        which the funding allocation makes assistance available, based 
        on the priority assigned by the Administrator to eligible 
        activities under subsection (b).
    ``(d) Limitation on Use of Funds.--For each fiscal year, not more 
than 5 percent of the funds received by an eligible entity under this 
section may be used to obtain technical assistance in planning, 
implementing, and maintaining eligible activities that are funded under 
this section.
    ``(e) Limitation on Receipt of Funds.--
            ``(1) In general.--Except as provided in paragraph (2), a 
        grant under this section shall not be provided to an eligible 
        entity that, as determined by the Administrator--
                    ``(A) does not have the technical, managerial, and 
                financial capability to ensure compliance with national 
                primary drinking water regulations applicable to the 
                eligible entity under section 1412; or
                    ``(B) is in significant noncompliance with any 
                applicable national primary drinking water regulation.
            ``(2) Exception for receipt of grant.--An eligible entity 
        described in paragraph (1) may receive a grant under this 
        section only--
                    ``(A) if the Administrator determines that use of 
                the grant will ensure compliance with national primary 
                drinking water regulations applicable to the eligible 
                entity under section 1412;
                    ``(B)(i) to restructure or consolidate the facility 
                to achieve compliance with applicable national primary 
                drinking water regulations; or
                    ``(ii) in a case in which restructuring or 
                consolidation of the facility is not practicable, if 
                the Administrator determines that--
                            ``(I) the eligible entity has made a good 
                        faith effort to achieve compliance with 
                        applicable national primary drinking water 
                        regulations; and
                            ``(II) the eligible entity is adhering to 
                        an enforceable schedule for achieving those 
                        regulations; and
                    ``(C) in a case in which paragraph (1)(A) applies 
                to an eligible entity, and the eligible entity agrees 
                to undertake feasible and appropriate changes in 
                operations (including changes in ownership, management, 
                accounting, rates, maintenance, consolidation, 
provision of an alternative water supply, or other procedures), if the 
Administrator determines that the measures are necessary to ensure that 
the eligible entity has the technical, managerial, and financial 
capability to comply with applicable national primary drinking water 
regulations over the long term.
            ``(3) Review.--Before providing assistance under this 
        section to an eligible entity that is in significant 
        noncompliance with any national primary drinking water 
        regulation applicable to the eligible entity under section 
        1412, the Administrator shall conduct a review to determine 
        whether paragraph (1)(A) applies to the entity.
    ``(f) Cost Sharing.--
            ``(1) In general.--
                    ``(A) Limit.--Except as provided in paragraph (2), 
                the share of the total cost of an eligible activity 
                funded by a grant under this section shall not exceed 
                80 percent.
                    ``(B) Use of other federal funds.--To pay the 
                portion of an eligible activity that may not be funded 
                by a grant under this section, an eligible entity may 
                use Federal financial assistance other than assistance 
                received under this section.
            ``(2) Waiver of cost-sharing requirement.--
                    ``(A) In general.--The Administrator may waive the 
                requirement of an eligible entity to pay all or a 
                portion of the share of eligible activity that may not 
                be funded by a grant under this section based on a 
                determination by the Administrator that the eligible 
                entity is unable to pay any or all of the share.
                    ``(B) Limitation.--For each fiscal year, the total 
                amount of cost-share waivers provided by the 
                Administrator under subparagraph (A) shall not exceed 
                30 percent of the amount of funding allocated to 
                eligible entities located in areas governed by Indian 
                Tribes for the fiscal year under section 1472(c)(2)(A).
    ``(g) Unobligated Funds.--Any funds not obligated by the small 
public water system assistance program established under subsection (a) 
for a purpose consistent with section 1472(c)(2)(B) and subsection (c) 
within 1 year after the date of allocation of the funds by the 
Administrator under section 1472(c)(2)(A) shall be returned to the 
Administrator for reallocation under that section.
    ``(h) Reports.--Not later than November 1 following each fiscal 
year in which an Indian Tribe receives funding under this section, the 
Indian Tribe shall submit to the Administrator a report that, for the 
preceding fiscal year--
            ``(1) identifies the number of grants awarded to eligible 
        entities located in areas governed by the Indian Tribe;
            ``(2) identifies each such eligible entity that received a 
        grant to carry out an eligible activity;
            ``(3) identifies the amount of each grant provided to such 
        an eligible entity to carry out an eligible activity; and
            ``(4) describes each eligible activity funded by such 
        grants (including the status of the eligible activity).

``SEC. 1475. AUTHORIZATION OF APPROPRIATIONS.

    ``There is authorized to be appropriated to carry out this part 
$750,000,000 for each of fiscal years 2002 through 2006.''.
                                 &lt;all&gt;

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