Beginning in FY 1975, a grant may not be made unless the applicant demonstrates that alternative waste management techniques have been studied, and that the treatment works will provide for application of the best practicable waste treatment technology, allowing as appropriate for recycling at a later date (Section 201(d)).

We agree with the requirement that the best practicable treatment technology be employed after it has been identified through consideration of alternative waste management techniques that could be employed.

Section 202. The Federal share of construction costs, beginning in FY 1973 is a flat 60%, increased to 75% if the State agrees to pay 15%.

We are opposed to the proposal to increase the Federal share to a maximum of 75% of the cost of construction. The meaningful involvement and responsibility of States and local governments in this effort are absolutely essential if the programs are to work. This cannot be achieved without a commitment of substantial State and local matching funds.

When States and localities are obliged to contribute substantial portions of the costs of waste treatment facilities, it necessarily follows that all levels of government then endeavor to produce the needed facilities which can most effectively perform the task at the least possible cost.

Section 203 provides that upon EPA approval of a project it shall be deemed a contractual obligation of the United States.

We are opposed to the substitution of contracts for grants. The contract approach sidesteps all the safeguards provided by the budgetary-appropriations process. We believe this is highly undesirable in a program of constantly changing needs and costs assessment.

We believe that the system of grants and annual appropriations is essential and recommend that it be retained in the law.

Section 204. Grant conditions include (1) inclusion of the project in any applicable comprehensive river basin plan developed under Section 209 of this Act; (2) certification of priority by the State agency; (3) adequate provision for operation and maintenance, including provisions for user charges to recover the costs of operation, maintenance and replacement; (4) provision for recovery from industrial users of the capital costs attributable to the Federal share of the plant's industrial waste treatment capacity (this cost recovery reverts to the Federal disaster fund set up under the Small Business Act); (5) provision for adequate reserve capacity; and (6) legal, institutional and other capability for insuring adequate construction, operation, maintenance, and expansion of treatment works. EPA would be required to issue guidelines governing user charges.

We generally favor these provisions. However, we cannot agree that industrial user charges attributable to the Federal share of the capital costs of a project should revert to the U.S. Treasury, nor that such funds should be made available to the disaster relief fund.

We strongly support the concept of requiring that grant recipients have the legal, institutional, and economic capability of self-sufficiency. Accordingly, we believe that funds recovered from user charges should be retained by the communities in support of this important objective.

We are opposed to the inclusion of "expansion" as a part of the basis for determining user charges as provided in Section 204 (b) (1) (A). We believe that such practice is legally precluded in many communities and does not represent sound municipal economic practice. However, "expansion" is essential to the self-sufficiency objectives and should be retained in Subsection 204 (b) (1) (C).

Section 205. Allocation and reallocation (at the end of the fiscal year) of construction grant funds would be made on the basis of need, as determined by the "Cost of Clean Water" for FY 1973 and 1974, and revised studies thereafter.

EPA strongly endorses an allocation formula based on identified needs. We recommend that needs be determined on criteria including seriousness of pollution, population and industrial concentrations, natural conditions and other relevant factors.

Also language similar or the same as that included on S. 2770, Section 205 (d) (1) is needed to assure adequate funding of the Blue Plains Sewage Treatment Plant since the allocation formula would not provide sufficient funds to the District of Columbia. Also, no allocation formula is provided for FY 1972 funds. Section 206 provides for reimbursement of State and local funds used to pre

finance the Federal share of projects initiated between June 30, 1966 and July 1, 1971. In addition, projects may be approved for payment of the Federal share out of later year's allocation, in the event that all funds allocated to a State in the fiscal year in which the construction is undertaken have been obligated. Reimbursement for projects constructed between June 30, 1956 and June 30, 1966 would be authorized as the difference between the amount of Federal assistance already received, and 30% of project costs. For projects constructed between June 30, 1966 and July 1, 1971, reimbursement would be authorized as the difference between the amount of Federal assistance already received and the amount for which it was eligible. $2.75 billion is authorized to be appropriated for purposes of this section.

We strongly object to the "windfall" reimbursement of 1956-1966 projects. There is no guarantee that such payment will do anything to make our water cleaner. It is fund distribution unrelated to environmental protection, Revenue sharing, if that is the object, is better achieved under a general mechanism based on financial rather than clean water needs. However, we do endorse reimbursement to cover the full Federal share allowable under current law, which applies to post-1966 projects only.

Section 207 authorizes funding for waste treatment construction grants as follows: Appropriations authority of $2 billion in FY 1972; and $5, $6 and $7 billion in FY 1973-1975.

We continue to support our originally proposed three year, $6 billion construction grant program. Our proposal is based on the most comprehensive and reliable assessment of waste treatment needs available. Further, the waste treatment construction industry does not presently have the capability nor do we believe it can expand rapidly enough to provide for the construction larger funding demands. Costs, already inflated in this area, will undoubtedly mount as the lag between construction capacity and funding increases.

Section 208, entitled “Areawide Waste Treatment Management", provides that the Governors of States, with EPA guidance, would designate the boundaries of urban-industrial or other seriously polluted areas appropriate for regional waste treatment management, and agencies to develop areawide waste treatment management plans for such areas. Within two years after designation of an agency, each would be required to develop plans for its area, which would include (1) establishment of construction priorities for treatment works; (2) identification of construction priorities for treatment works; (2) identification of future waste collection and treatment needs; (3) establishment of a regulatory program; and (4) processes to identify various nonpoint sources of pollution, with procedures to control them to the extent feasible. After certification by the Governor, the plans would be submitted to EPA for approval. EPA would be required to provide financial assistance to designated planning agencies, in amounts equal to 100% of their planning costs in each of the first four years, and not to exceed 75% of such costs thereafter, $300 million would be authorized for the first three years. The Secretary of the Army would be authorized to consult with and provide technical and operating assistance to planning agencies, and would be authorized $50 million for each of the first three years.

Although we fully endorse the concept of regional waste treatment planning, we do not favor the provisions of Section 208 for several reasons. Basin-wide regional and metropolitan planning are already required pursuant to regulations governing waste treatment facility construction grants. Moreover, new special purpose authorities should not be created without regard to other planning underway or without regard to important functions of other levels of government.

Furthermore, we strongly oppose 100% Federal funding of these planning costs. If Federal financial assistance for such activities is to be provided, substantial State and local matching is essential.

We are also opposed to the provision of 208 (h) which, evidently, would sanction a direct role for the U.S. Army Corps of Engineers in the planning and operation of regional waste treatment management. Such provisions would tend to divide Federal authority and activities regarding environmental protection, which were consolidated under EPA's leadership by Reorganization Plan No. 3 of 1970. The Corps does have planning expertise which can be utilized in many instances in developing alternatives for regional waste treatment. However, in such cases the Corps should provide assistance to EPA and to local and State agencies under EPA criteria upon request. We do not believe that a separate authorization for the Corps for this activity is appropriate.

Section 209 would direct the President to prepare, through the Water Resources Council, Type B plans for all U.S. river basins by January 1, 1980. $200 million would be authorized for this purpose.

We are opposed to this provision. Adequate authorization for Type B studies is provided in the Water Resources Planning Act and should not be repeated in the Federal Water Pollution Control Act. We also believe that appropriations for river basin aspects of water quality management planning should be made directly to the agencies responsible for such planning.

Section 210 would add "sewage collection" systems to the definition of “waste treatment works".

We believe that sewers, per se, are more directly related to community development than to pollution control. Therefore, EPA does not support the inclusion of sewage collection systems for grant assistance under the Federal Water Pollntion Control Act. Moreover, adequate mechanisms exist for coordinating EPA's waste treatment facility construction grants program and HUD's sewage colleetion systems program and more are being developed administratively as neces sary. The proposed legislative change would cause needless confusion and delay by further dividing Federal responsibilities for sewage collection systems.

Section 210(2) (c) provides for the publication of guidelines for the evaluation of methods of waste treatment. We recommend that the deadline for the prepsration of these guidelines be extended by an additional 180 days.

TITLE III-STANDARDS AND ENFORCEMENT

This Title would substantially alter the standard setting and enforcement provisions of present law. In fact, the water quality standards approach would be abandoned over a period of time.

Before discussing particular aspects of the Title III provisions of H.R. 11895 and 11896, we would like to point out a basic consideration. As was proposed by the Administration earlier this year, the current law needs to be strengthened. primarily by providing for effluent limitations as an application and enforcement tool in the achievement of the standards. We believe that the establishment of effluent limitations, that is, a direct address to the quality and quantity of the effluent is the key ingredient. We need clear authority to regulate effluent sources directly. We believe that regulation must take into account both the best practicable treatment currently available and ambient water quality standards where higher treatment is required to protect ambient water quality.

We are convinced that adequate effluent limitations cannot be based entirely on ambient water quality standards on the one hand nor entirely on the availability of technology on the other. To attempt to base limitations entirely on ambient water quality considerations assumes an ability to relate accurately ambient water quality with effluents. But we are not able to do that with sufficient precision at this time. It does not follow, however, that all effluent limits be based entirely on the availability of control technology as the bills would provide. Both ambient water quality considerations and available control technology must be taken into account.

Section 301 (b) (1) calls for the achievement of the following point source effluent controls:

(1) For industrial point sources: by January 1, 1976, the best practicable control technology currently available, as defined by the Administrator of EPA. (2) For discharges into publicly owned treatment works: by January 1, 1976, compliance with applicable pretreatment requirements.

(3) For publicly owned treatment works: secondary treatment as defined by the Administrator if the project is in existence on January 1, 1976 or is approved prior to June 30, 1974.

(4) Any more stringent controls required under State law or present Federal law.

We favor the requirement of "best practicable treatment" for industrial sources, pretreatment requirements for industrial discharges into municipal systems, and secondary treatment for municipal sources for which Federal grants will be made available.

However, we are convinced that a 2-year extension from the 1976 deadline will be necessary for some industrial sources. Similarly, we are of the view that all municipal sources in existence in 1976 cannot achieve secondary treatment: the secondary treatment requirement should only apply to projects for which new Federal grants are provided.

Section 301 (b) (2) calls for the achievement, by January 1, 1981, of the following point source effluent controls:

(1) For industrial point sources: elimination of discharge of all pollutants, unless on the basis of information supplied by the discharger it is determined that compliance is not attainable at a reasonable cost, in which event application of the best available technology will be required, taking its cost into account. (2) For discharges into publicly owned treatment works: same as under section 301 (b) (1) above.

(3) For publicly owned treatment works: compliance with Section 201 (d) (i.e., best practicable waste treatment technology including provision for recycling as appropriate).

We see no valid basis to move from "best practicable treatment" to "best available treatment" for industrial sources simply to move closer to the goal of "no discharge of pollutants." We believe that "best practicable treatment" representing a range of technology should continue as a base. It is to be expected that the base or threshold of that range will be higher in 1976 than it is today. However, for existing sources we believe that levels of treatment beyond "best practicable" can only be validly required if necessary to support water quality standards.

We are also of the view that effluent limitations requirements after 1976 should emerge from new State implementation plans which identify beneficial uses and potentials, and which take regional and basin-wide factors into account. We believe that "best practicable treatment" should be required of municipal sources based on water quality standards.

EPA would also point out that by couching its requirements in terms of a "not later than" date, this section could produce a hiatus in enforcement activities until January 1, 1976. An additional hiatus could occur between 1976 and 1981 with respect to the more stringent standards of Section 309(b)(2). To avoid any such implication, Section 309 (b) should be redrafted to require compliance "as soon as possible but in no event later than January 1, 1976.” Without this amendment there will be a strong tendency on the part of industry, and perhaps a Court, to view the 1976 and 1981 dates as deadlines not requiring earlier compliance with the standards of treatment required by Section 301(b), if that is possible.

We do not favor the provisions of Section 302 since it is premised on a requirement of "best available technology" as a base. As we have indicated above, we are opposed to the approach whereby effluent limitations in the post-1976 period would be based on best available technology.

However, with respect to the specific language of Section 302 we have the following comments. Section 302 mixes into its area-wide approach a procedure focusing on individual discharges, with inadequate mechanisms for coordination among State and Federal agencies. In particular, Section 302 ignores the possibility that specific waters to which the Section 302 limitations will apply may cover more than one State jurisdiction. In addition, some of the discharges within the area may be subject to exclusive State jurisdiction under an approved Section 402 permit program, while others may be subject to Federal overview. For these reasons, a multiplicity of jurisdictions could well apply to discharges within the area as to which Section 302 limitations may be sought. This situation will give rise to at least two problems.

First, there is no guidance as to how such hearing shall be run. Second, and more importantly, what would happen under the bill if EPA believes a more stringent standard is necessary in a particular area but the State disagrees? Apparently, Section 402 permits under exclusive State jurisdiction would incorporate the less restrictive standard while other permits issued by EPA would apply the more stringent conditions. The same sort of conflict could occur between States. These conflicts are inevitable and would obviously undermine the area planning so necessary to make Section 302 more than a dead letter.

Section 303 provides that the Administrator is authorized to permit the discharge of specific pollutants under controlled conditions associated with approved “aquaculture" projects.

EPA has no objection to this provision.

Section 304. For the purpose of assisting the States, EPA would be required to publish (1) criteria of water quality; (2) guidelines for effluent limitations; (3) information on treatment methods; (4) information on alternative waste treatment management techniques; (5) information on methods to control pollution from non-point sources; (6) guidelines for pretreatment standards

for pollutants which are not susceptible to treatment in treatment works; (7) guidelines for analysis of pollutants; and (8) guidelines concerning monitoring and reporting requirements, enforcement provisions, and acquisition of information by the States.

EPA generally favors these information requirements. We would, however. suggest amending Section 304 (c) to require that the national standards of performance guidelines be issued at the same time as the initial publication under Section 206(b) (1) (B) of the standards to which the information relates. We would also suggest that the last sentence of Section 304 (f) (1) so as to conform with Section 307, to which it relates, be amended as follows:

Guidelines under this subsection shall be established to control and prevent the discharge into publicly owned treatment works of any pollutant which interferes with, passes through, or otherwise is incompatible with such works.

We recommend that Section 304(b) (2) (B) be amended by adding the following language after the word "competition":

The results of stream modeling and sampling technology taking into account the hydrology, climate, influence of other discharges, documented stream quality specifications, natural physical, chemical and biological or aesthetic values of the stream under the conditions of one year in ten probable low flows and extremes of recorded temperature for the area of discharge.

We also recommend that the performance time in Section 304 (d)(1) and 304 (h) (1) be extended to 90 days; that the performance times in Sections 304 (d) (2) and 304 (i) be extended to one year; that the performance times in Section 304 (f) (1) and 304(h) (2) be extended to six months.

Under Section 305, EPA would be required to prepare a report by July 1, 1973, describing the quality of the Nation's waters' including an inventory and analysis of all point sources. On July 1, 1974, and each year thereafter, each State would be required to submit a water quality progress report.

EPA does not object to this provision. However, it should be noted that the time constraints are very stringent for a report of this detail.

Section 306. EPA would establish Federal standards of performance for new sources within specified categories of water pollution sources: Twenty-eight such categories—primarily various manufacturing processes-are enumerated in the section. The required standard of performance for these new sources would incorporate the greatest degree of effluent reduction which the Administrator determines to be achievable through application of the best available technology, and would include, where appropriate, a standard permitting no discharge of pollutants.

EPA generally favors this provision. We would point out, however, that the procedure for delegating to the States the authority to enforce new source performance standards should not be read to run counter to any procedures under the Section 402 permit program.

Under Section 307, EPA would establish Federal effluent standards and prohibitions for toxic substances, and regulations establishing pretreatment standards for discharges of pollutants into publicly owned treatment works.

Although we favor the control of toxic and hazardous materials, we do not endorse the provisions of Section 307 relating to toxic substances. We believe toxic substances should be dealt with under H.R. 5276, an Administration proposal to amend the Federal Hazardous Substances Act and Section 12 of the Federal Water Pollution Control Act.

We favor the pretreatment provisions of Section 307, but recommend that the performance time of Section 307(b) (1) be extended to six months.

Section 308. Certain authorities are conferred upon EPA concerning inspections, monitoring and entry.

EPA generally favors these provisions. We would, however, suggest that Section 308 (c) is confusing, since it states that only trade secrets are entitled to confidentiality, but then refers to the "purpose of Section 1905 of title 18." 18 U.S.C. 1905 covers much more than trade secrets-it covers “trade secrets, processes, operations, style or work, or apparatus or... the identity, confidential statistical data, amounts of source of any income, profits, losses, or expenditures...." We urge that the bill be amended to extend confidentiality to "trade secrets of such persons and all other information entitled to protection under 18 U.S.C. 1905."

Section 309 provides a system of administrative orders, civil and criminal actions, and civil and criminal penalties to redress violations of effluent limitations, permits, discharge prohibitions, and standards of performance under Titles