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                                                       Calendar No. 272
107th Congress                                                   Report
                                 SENATE
 1st Session                                                    107-118

======================================================================



 
       WATER INFRASTRUCTURE SECURITY AND RESEARCH DEVELOPMENT ACT

                                _______
                                

               December 10, 2001.--Ordered to be printed

                                _______
                                

   Mr. Jeffords, from the Committee on Environment and Public Works, 
                        submitted the following

                              R E P O R T

                         [to accompany S. 1593]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Environment and Public Works, to which was 
referred a bill (S. 1593), a bill to authorize the 
Administrator of the Environmental Protection Agency to 
establish a grant program to support research projects on 
critical infrastructure protection for water supply systems, 
and for other purposes, having considered the same reports 
favorably thereon with an amendment and recommends that the 
bill, as amended, do pass.

                    General Statement and Background

    S. 1593 authorizes the U.S. Environmental Protection Agency 
to provide funding to support research projects on critical 
infrastructure protection for water supply systems.
    Since the events of September 11, 2001, the United States 
has worked to ensure that our critical infrastructure systems 
are protected. There are many short-term actions that have 
already been taken.
    Based on the recommendations of Presidential Decision 
Directive 63, issued by President Clinton in 1998, the 
Environmental Protection Agency and its industry partner, the 
Association of Metropolitan Water Agencies, have established a 
communications system, a water infrastructure Information 
Sharing and Analysis Center, designed to provide real-time 
threat assessment data to water utilities throughout the 
nation. Through this partnership, the Environmental Protection 
Agency and the Association of Metropolitan Water Agencies are 
working to develop generic assessment tools that individual 
water utilities can use to assess their facilities for 
potential physical and cyber threats. In October 2001, the 
Environmental Protection Agency established the Water 
Protection Task Force to ensure that activities to protect and 
secure water supply infrastructure are comprehensive and are 
carried out expeditiously. During that same month, the EPA 
disseminated information to America's water utilities 
information about specific steps they can take to protect their 
sources of supply and their infrastructure. Working with the 
FBI, EPA also sent notice to local law enforcement agencies 
asking them to work closely with their local water utilities to 
provide extra security. The committee intends for S. 1593 to 
supplement these short-term efforts by focusing on mid- to 
long-term actions designed to enhance our current water 
security capabilities.
    S. 1593 focuses on mid-term and long-term efforts that 
will:
      continue ongoing work called for by Presidential 
Decision Directive 63
      conduct research to assess potential threats to 
our water supply system, and
       develop solutions to safeguard our water systems 
against those threats.
    This legislation authorizes twelve million dollars per year 
from 2002 to 2007 for the Environmental Protection Agency to 
use for grants to or cooperative agreements with research 
institutions for these purposes.

                     Objectives of the Legislation

    The work conducted under this legislation will yield 
valuable information, technologies, processes, and guidelines 
regarding physical and cyber threats to our water supply 
systems that water systems throughout the nation will be able 
to apply at their own facilities.
    Specifically, projects eligible for funding under this 
program will:

      assess security issues by conducting 
vulnerability assessments and developing tools to conduct those 
assessments;
      protect water supply systems by--
        --developing technologies, processes, guidelines, 
        standards, and procedures that protect the physical 
        assets, information systems, and cyber assets of water 
        supply systems from biological, chemical, and 
        radiological contamination;
        --developing real-time monitoring systems to protect 
        against biological, chemical, and radiological 
        contamination;
      develop technologies and processes for 
mitigation, response, and recovery from biological, chemical, 
and radiological contamination of our water supplies;
      continue the operation of the Information Sharing 
and Analysis Center to provide current threat information in a 
timely manner to water supply systems;
      test and evaluate new technologies and processes 
by developing pilot facilities to demonstrate these new 
approaches and their affect on operations and costs of the 
water supply systems.

    The legislation includes a specific provision requiring 
that projects conducted under this program reflect the needs of 
water supply systems of various sizes and geographic areas of 
the United States. This section is intended to ensure that both 
large and small and rural and urban systems in all areas of the 
country receive some focus under this program. With a diverse 
approach to the work conducted under this program, the 
Environmental Protection Agency will ensure that all aspects of 
our nation's water supply system benefit from the information, 
technologies, and processes developed through this program.

                      Section-by-Section Analysis

Section 1. Short Title
    Water Infrastructure Security and Research Development Act.
Section 2. Definitions
    This section defines key terms used in the bill. 
Administrator is defined as the Administrator of the 
Environmental Protection Agency.
    ``Research Institution'' is defined as a public or private 
nonprofit institution or other entity that has the expertise to 
perform research on the security of water supply systems and 
complies with applicable laws for safeguarding sensitive 
information. National laboratories are specifically included in 
this definition. Grants, cooperative agreements, or contractual 
arrangements that the Environmental Protection Agency 
undertakes in this program will be with research institutions. 
The requirement to safeguard sensitive information is specified 
here to ensure that the research conducted under this program 
is not misused or made available to anyone for purposes other 
than that which is it was intended-to increase the security of 
our nation's water supply system.
    ``Water supply system'' is defined as a public water system 
as defined in section 1401 of the Safe Drinking Water Act (42 
U.S.C. 300f) or a publicly owned treatment works, which is a 
treatment works as defined in section 212 of the Federal Water 
Pollution Control Act (33 U.S.C. 1292.) For the purposes of 
this Act only, the term water supply system includes water 
sources, a system of aqueducts, tunnels, reservoirs, or pumping 
facilities to convey water from the water source, a treatment 
facility, a distribution system carrying finished water to 
users through a system of mains and subsidiary pipes, or a 
wastewater collection and treatment system. The committee 
intends that this expanded definition apply only to this Act. 
It in no way seeks to modify any existing definitions under the 
Safe Drinking Water Act or the Federal Water Pollution Control 
Act. The definition for this Act is intended to ensure that 
each part of our nation's water supply system is addressed by 
this program and that each part receives the benefit of the 
information collected. This definition specifically includes 
both drinking water and wastewater systems for the same 
purpose.
Section 3. Water Infrastructure Security Grant Program
    This section establishes the program. It requires the 
Administrator to establish a program to make grants to, and 
enter into cooperative agreements or contracts with, research 
institutions to improve the protection and security of water 
supply systems by carrying out eligible projects to address 
physical and cyber threats to water supply systems.
    It requires that the Administrator consult with the 
Director of Central Intelligence to ensure that programs 
conducted under this Act appropriately protect classified 
information. This language reflects a request by the Senate 
Select Committee on Intelligence to ensure that this Act 
clearly states that any classified information that is produced 
or used by this program will be appropriately protected. This 
section includes procedures for the Administrator to consult 
with all other appropriate Federal agencies regarding 
guidelines, procedures, and criteria for the award of 
assistance under this program. The committee expects that as 
part of this process, the Administrator will work with the 
Federal Bureau of Investigation and other appropriate agencies 
to ensure that non-classified information of a sensitive nature 
is appropriately used and safeguarded.
    This section describes the types of projects that will be 
eligible for assistance under this program to include projects 
that:

        (1) assess security issues for water supply systems by
                a. conducting system-specific and system-wide 
                assessments of the scope of and future 
                implications of security issues for water 
                supply systems; and
                b. developing and refining vulnerability 
                assessment tools for water supply systems to 
                identify physical vulnerabilities, including 
                biological, chemical, and radiological 
                contamination; and cyber vulnerabilities;
        (2) protect water supply systems from a potential 
        threat by:
                a. developing technologies, processes, 
                guidelines, standards, and procedures that 
                protect
                        i. the physical assets of water supply 
                        systems, including protection from the 
                        impact of biological, chemical, and 
                        radiological contamination;
                        ii. information systems, including 
                        process controls and supervisory 
                        control and data acquisition; and
                        iii. cyber systems at water supply 
                        systems;
                b. developing real-time monitoring systems to 
                protect against biological, chemical, or 
                radiological attack; and
                c. developing educational and awareness 
                programs for water supply systems;
        (3) develop technologies and processes for addressing 
        the mitigation, response, and recovery of biological, 
        chemical, and radiological contamination of water 
        supply systems;
        (4) implement the requirements of Presidential Decision 
        Directive 63 by refining and operating the Information 
        Sharing and Analysis Center to capture and share 
        information concerning threats, malevolent events, and 
        best practices; and
        (5) test and evaluate new technologies and processes 
        by--
                a. developing regional pilot facilities to 
                demonstrate upgraded security systems, assess 
                new technologies, and determine the effect of 
                enhanced security on operations and costs of 
                the water supply system; or
                b. conducting demonstrations of other 
                technologies and processes to protect water 
                supply systems.

    This section also establishes selection criteria for awards 
of assistance. It requires that the Administrator establish 
guidelines, procedures, and criteria for awards in consultation 
with representatives of appropriate Federal and State agencies, 
water supply systems, and other appropriate public and private 
entities. The committee expects that as part of this process, 
the Administrator will work with the Federal Bureau of 
Investigation and other appropriate agencies to ensure that 
non-classified information of a sensitive nature is 
appropriately used and safeguarded. The committee expects that 
classified information will be dealt with as described in 
section 3(b) of this Act.
    This section requires that the Administrator ensure that 
projects carried out under this Act reflect the needs of water 
supply systems of various sizes and geographic areas of the 
United States. This language is intended to ensure that large 
and small, rural and urban, wealthy and disadvantaged systems 
in all areas of the country benefit from the information, 
technologies, and processes developed through this program. The 
committee intends to ensure that small, rural and disadvantaged 
systems receive an appropriate level of attention.
    This section also establishes reporting requirements and 
deadlines. First, the Administrator is required to transmit a 
copy of the guidelines, procedures, and criteria established 
for awards under this program to the Committee on Science of 
the House of Representatives and the Committee on Environment 
and Public Works of the Senate. Second, this section provides 
for not more than a 30-day period after transmittal of these 
reports for the Administrator to publish the guidelines, 
procedures, and criteria in the Federal Register. Third, this 
section requires that the Administrator periodically submit to 
the Committee on Science of the House of Representatives and 
the Committee on Environment and Public Works of the Senate a 
report on the status of the program.
    Assistance in any given year for an individual project is 
limited to $1,000,000. This does not preclude one research 
institution from receiving more than $1,000,000 in one year for 
more than one individual projects. It does not preclude a 
multi-year project from receiving $1,000,000 more than one 
time.
    The Federal share for testing and evaluation projects 
described in this section (subsection (c)(5)) shall be 50 
percent. The Federal share for all other projects shall be 100 
percent. The non-Federal share may be provided in cash or in-
kind.
    This section includes information sharing requirements to 
ensure that the information generated by this program is made 
available to all U.S. water systems. The Administrator is 
required to evaluate the results of the projects conducted 
under this program and, as soon as practicable, disseminate the 
results through the Information Sharing and Analysis Center or 
other appropriate means. The committee intends for the 
Administrator to ensure that sensitive information is 
safeguarded during this process, and that classified 
information is handled in accordance with section 3(b) of this 
Act.
Section 4. Authorization of Appropriations
    This section authorizes $12,000,000 per year for each of 
fiscal years 2002 through 2007, to remain available until 
expended.
Section 5. Assistance for Arsenic Requirements
    This section provides that the Administrator shall use 
$20,000,000 per year in 2002 and 2003 of unobligated funds to 
provide assistance for small water supply systems to comply 
with requirements relating to arsenic in drinking water. By 
including this language, the committee recognizes the 
commitment made by EPA Administrator in October 2001 to provide 
this level of funding over the next two years for research and 
development of more cost-effective technologies to help small 
systems to meet the new standard. The committee is aware of 
concerns raised regarding the potential cost of compliance with 
lower arsenic standards for small systems. The National Academy 
of Sciences, in a report released in September 2001, found that 
even at 3 ppb, the lowest level feasible to achieve, according 
to EPA's January 22, 2001 rule, the combined cancer risks are 
about 1 in 1000. The committee intends for the funds provided 
by this section to work to reduce the potential cost of 
compliance with lower arsenic standards for small systems to 
ensure that the level of protection of human health provided by 
the EPA's January 22, 2001 arsenic rule be available to 
individuals who are served not only by large systems but also 
by small systems.
Legislative History
    Senators Jeffords, Smith of New Hampshire, and Crapo 
introduced S. 1593 on October 30, 2001. Senator Graham of 
Florida co-sponsored the bill on November 8, 2001. Senator 
Corzine co-sponsored the bill on November 6, 2001, and Senator 
Bingaman co-sponsored the bill on November 15, 2001.

                                Hearings

    A hearing was held on S. 1593 and other infrastructure 
security bills on November 1, 2001 before the full committee. 
Witnesses included: Michael Brown, Deputy Director, Federal 
Emergency Management Agency, Washington, DC; Joe Moravec, 
Commissioner, Public Building Service, General Services 
Administration, Washington, DC; Dr. David Sampson, Assistant 
Secretary for Economic Development, Economic Development 
Administration, U.S. Department of Commerce, Washington, DC; 
Richard Meserve, Chairman, Nuclear Regulatory Commission, 
Rockville, MD; Herbert Mitchell, Associate Administrator for 
Disaster Assistance, Small Business Administration, Washington, 
DC; and Marianne L. Horinko, Assistant Administrator Office of 
Solid Waste and Emergency Response, Environmental Protection 
Agency, Washington, DC.

                             Rollcall Votes

    The Committee on Environment and Public Works met to 
consider S. 1593, a bill to authorize the Administrator of the 
Environmental Protection Agency to establish a grant program to 
support research projects on critical infrastructure protection 
for water supply systems, and for other purposes, on November 
8, 2001. The committee adopted by voice vote an amendment in 
the form of a substitute offered by Senators Jeffords, Smith of 
New Hampshire, Crapo, and Graham, after adopting an amendment 
by Senator Jeffords by voice vote.

                      Regulatory Impact Statement

    In compliance with section 11(b) of rule XXVI of the 
Standing Rules of the Senate, the committee makes evaluation of 
the regulatory impact of the reported bill.
    The bill, S. 1593, requires that the Administrator of the 
EPA issue the guidelines, procedures, and criteria for 
administration of this program in the Federal Register. The 
bill will not cause any adverse impact on the personal privacy 
of individuals.
    Mandates Assessment
    In compliance with the Unfunded Mandates Reform Act of 1995 
(Public Law 104-4), the committee finds that S. 1593 contains 
no intergovernmental or private-sector mandates as defined in 
the Unfunded Mandates Reform Act (UMRA) and would impose no 
costs on State, local, and tribal governments.

                          Cost of Legislation

    Section 403 of the Congressional Budget and Impoundment 
control Act requires that a statement of the cost of the 
reported bill, prepared by the Congressional Budget Office, be 
included in the report. That statement follows:
                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, November 16, 2001.

Hon. James Jeffords, Chairman,
Committee on Environment and Public Works,
U.S. Senate, Washington, DC.

Dear Mr. Chairman: The Congressional Budget Office has prepared 
the enclosed cost estimate for S. 1593, the Water 
Infrastructure Security and Research Development Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Deborah Reis, 
who can be reached at 226-2860.
            Sincerely,
                                             Dan L. Crippen
                              ----------                              

S. 1593 Water Infrastructure Security and Research Development Act, as 
        ordered reported by the Senate Committee on Environment and 
        Public Works on November 8, 2001

                                SUMMARY

    S. 1593 would authorize the appropriation of $72 million 
over the 2002-2007 period for the Environmental Protection 
Agency (EPA) to provide new grants to research institutions to 
carry out projects aimed at improving the protection and 
security of water supply systems, including protection from 
biological and chemical contamination.
    In addition, enacting S. 1593 would authorize EPA to use 
$40 million over the 2002-2003 period from funds previously 
appropriated (but not obligated) to provide assistance to small 
water supply systems to comply with new regulations on arsenic 
in drinking water. That additional spending is considered 
direct spending, so pay-as-you-go procedures would apply to the 
bill.
    S. 1593 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, and tribal 
governments.

                ESTIMATED COST TO THE FEDERAL GOVERNMENT

    The estimated budgetary impact of S. 1593 is shown in the 
following table. The costs of this legislation fall within 
budget function 300 (natural resources and environment).


                 By Fiscal Year, in Millions of Dollars
------------------------------------------------------------------------
                                   2002    2003    2004    2005    2006
------------------------------------------------------------------------
 CHANGES IN SPENDING SUBJECT TO
          APPROPRIATION
Authorization Level\1\..........      12      12      12      12      12
Estimated Outlays...............       5      10      12      12      12
   CHANGES IN DIRECT SPENDING
Estimated Budget Authority......       0       0       0       0       0
Estimated Outlays...............       8      17      12       3       0
------------------------------------------------------------------------
\1\ S. 1593 also would authorize the appropriation of $12 million for
  fiscal year 2007.

                           BASIS OF ESTIMATE

    For this estimate, CBO assumes that the bill will be 
enacted by the end of calendar year 2001, that the full amounts 
authorized will be appropriated each fiscal year, and that 
outlays will occur at rates similar to past funding for EPA's 
Science and Technology programs. CBO estimates that 
implementing S. 1593 would increase spending subject to 
appropriation by $51 million over the 2002-2006 period, with an 
additional $21 million to be spent after 2006.
    In addition, section 5 would authorize EPA to use $40 
million of funds previously appropriated (but not obligated) 
from its Safe Drinking Water State Revolving Fund program (or 
other programs) to provide grants to small water supply systems 
to comply with arsenic contamination requirements. Because this 
provision would allow EPA to spend funds that we estimate would 
not otherwise be used, we estimate this provision would 
increase direct spending by $40 million over the next five 
years.

                      PAY-AS-YOU-GO CONSIDERATIONS

    The Balanced Budget and Emergency Deficit Control Act sets 
up pay-as-you-go procedures for legislation affecting direct 
spending or receipts. The net changes in outlays that are 
subject to pay-as-you-go procedures are shown in the following 
table. For the purposes of enforcing pay-as-you-go procedures, 
only the effects in the budget year and the succeeding four 
years are counted.


                                     By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
                                   2002    2003    2004    2005    2006    2007    2008    2009    2010    2011
----------------------------------------------------------------------------------------------------------------
Changes in outlays..............       8      17      12       3       0       0       0       0       0       0
Changes in receipts.............     N/A     N/A     N/A     N/A     N/A     N/A     N/A     N/A     N/A     N/A
----------------------------------------------------------------------------------------------------------------

              INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

    S. 1593 contains no intergovernmental or private-sector 
mandates as defined in UMRA and would impose no costs on state, 
local, and tribal governments. The bill would benefit state and 
local governments by establishing a grant program for research 
institutions, including public universities, to improve the 
protection and security of public water supply systems. In 
addition, S. 1593 would authorize $40 million for small water 
supply systems to comply with requirements relating to arsenic 
in drinking water. Any costs associated with the grant programs 
would be considered a condition of aid.
Estimate Prepared by: Federal Costs: Susanne S. Mehlman Impact 
on State, Local, and Tribal Governments: Elyse Goldman Impact 
on the Private Sector: Cecil McPherson.

Estimate Approved by: Peter H. Fontaine Deputy Assistant 
Director for Budget Analysis.

                        Changes in Existing Law

    Section 12 of rule XXVI of the Standing Rules of the 
Senate, provides that reports to the Senate should show changes 
in existing law made by the bill as reported. Passage of this 
bill will make no changes to existing law.