
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document affected by Public Law 107-73]
[CITE: 42USC300j-12]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                    CHAPTER 6A--PUBLIC HEALTH SERVICE
 
             SUBCHAPTER XII--SAFETY OF PUBLIC WATER SYSTEMS
 
                       Part E--General Provisions
 
Sec. 300j-12. State revolving loan funds


(a) General authority

         (1) Grants to States to establish State loan funds

        (A) In general

            The Administrator shall offer to enter into agreements with 
        eligible States to make capitalization grants, including letters 
        of credit, to the States under this subsection to further the 
        health protection objectives of this subchapter, promote the 
        efficient use of fund resources, and for other purposes as are 
        specified in this subchapter.

        (B) Establishment of fund

            To be eligible to receive a capitalization grant under this 
        section, a State shall establish a drinking water treatment 
        revolving loan fund (referred to in this section as a ``State 
        loan fund'') and comply with the other requirements of this 
        section. Each grant to a State under this section shall be 
        deposited in the State loan fund established by the State, 
        except as otherwise provided in this section and in other 
        provisions of this subchapter. No funds authorized by other 
        provisions of this subchapter to be used for other purposes 
        specified in this subchapter shall be deposited in any State 
        loan fund.

        (C) Extended period

            The grant to a State shall be available to the State for 
        obligation during the fiscal year for which the funds are 
        authorized and during the following fiscal year, except that 
        grants made available from funds provided prior to fiscal year 
        1997 shall be available for obligation during each of the fiscal 
        years 1997 and 1998.

        (D) Allotment formula

            Except as otherwise provided in this section, funds made 
        available to carry out this section shall be allotted to States 
        that have entered into an agreement pursuant to this section 
        (other than the District of Columbia) in accordance with--
                (i) for each of fiscal years 1995 through 1997, a 
            formula that is the same as the formula used to distribute 
            public water system supervision grant funds under section 
            300j-2 of this title in fiscal year 1995, except that the 
            minimum proportionate share established in the formula shall 
            be 1 percent of available funds and the formula shall be 
            adjusted to include a minimum proportionate share for the 
            State of Wyoming and the District of Columbia; and
                (ii) for fiscal year 1998 and each subsequent fiscal 
            year, a formula that allocates to each State the 
            proportional share of the State needs identified in the most 
            recent survey conducted pursuant to subsection (h) of this 
            section, except that the minimum proportionate share 
            provided to each State shall be the same as the minimum 
            proportionate share provided under clause (i).

        (E) Reallotment

            The grants not obligated by the last day of the period for 
        which the grants are available shall be reallotted according to 
        the appropriate criteria set forth in subparagraph (D), except 
        that the Administrator may reserve and allocate 10 percent of 
        the remaining amount for financial assistance to Indian Tribes 
        in addition to the amount allotted under subsection (i) of this 
        section and none of the funds reallotted by the Administrator 
        shall be reallotted to any State that has not obligated all sums 
        allotted to the State pursuant to this section during the period 
        in which the sums were available for obligation.

        (F) Nonprimacy States

            The State allotment for a State not exercising primary 
        enforcement responsibility for public water systems shall not be 
        deposited in any such fund but shall be allotted by the 
        Administrator under this subparagraph. Pursuant to section 300j-
        2(a)(9)(A) of this title such sums allotted under this 
        subparagraph shall be reserved as needed by the Administrator to 
        exercise primary enforcement responsibility under this 
        subchapter in such State and the remainder shall be reallotted 
        to States exercising primary enforcement responsibility for 
        public water systems for deposit in such funds. Whenever the 
        Administrator makes a final determination pursuant to section 
        300g-2(b) of this title that the requirements of section 300g-
        2(a) of this title are no longer being met by a State, 
        additional grants for such State under this subchapter shall be 
        immediately terminated by the Administrator. This subparagraph 
        shall not apply to any State not exercising primary enforcement 
        responsibility for public water systems as of August 6, 1996.

        (G) Other programs

            (i) New system capacity

                Beginning in fiscal year 1999, the Administrator shall 
            withhold 20 percent of each capitalization grant made 
            pursuant to this section to a State unless the State has met 
            the requirements of section 300g-9(a) of this title 
            (relating to capacity development) and shall withhold 10 
            percent for fiscal year 2001, 15 percent for fiscal year 
            2002, and 20 percent for fiscal year 2003 if the State has 
            not complied with the provisions of section 300g-9(c) of 
            this title (relating to capacity development strategies). 
            Not more than a total of 20 percent of the capitalization 
            grants made to a State in any fiscal year may be withheld 
            under the preceding provisions of this clause. All funds 
            withheld by the Administrator pursuant to this clause shall 
            be reallotted by the Administrator on the basis of the same 
            ratio as is applicable to funds allotted under subparagraph 
            (D). None of the funds reallotted by the Administrator 
            pursuant to this paragraph shall be allotted to a State 
            unless the State has met the requirements of section 300g-9 
            of this title (relating to capacity development).
            (ii) Operator certification

                The Administrator shall withhold 20 percent of each 
            capitalization grant made pursuant to this section unless 
            the State has met the requirements of 300g-8 \1\ of this 
            title (relating to operator certification). All funds 
            withheld by the Administrator pursuant to this clause shall 
            be reallotted by the Administrator on the basis of the same 
            ratio as applicable to funds allotted under subparagraph 
            (D). None of the funds reallotted by the Administrator 
            pursuant to this paragraph shall be allotted to a State 
            unless the State has met the requirements of section 300g-8 
            of this title (relating to operator certification).
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    \1\ So in original. Probably should be preceded by ``section''.
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                          (2) Use of funds

        Except as otherwise authorized by this subchapter, amounts 
    deposited in a State loan fund, including loan repayments and 
    interest earned on such amounts, shall be used only for providing 
    loans or loan guarantees, or as a source of reserve and security for 
    leveraged loans, the proceeds of which are deposited in a State loan 
    fund established under paragraph (1), or other financial assistance 
    authorized under this section to community water systems and 
    nonprofit noncommunity water systems, other than systems owned by 
    Federal agencies. Financial assistance under this section may be 
    used by a public water system only for expenditures (not including 
    monitoring, operation, and maintenance expenditures) of a type or 
    category which the Administrator has determined, through guidance, 
    will facilitate compliance with national primary drinking water 
    regulations applicable to the system under section 300g-1 of this 
    title or otherwise significantly further the health protection 
    objectives of this subchapter. The funds may also be used to provide 
    loans to a system referred to in section 300f(4)(B) of this title 
    for the purpose of providing the treatment described in section 
    300f(4)(B)(i)(III) of this title. The funds shall not be used for 
    the acquisition of real property or interests therein, unless the 
    acquisition is integral to a project authorized by this paragraph 
    and the purchase is from a willing seller. Of the amount credited to 
    any State loan fund established under this section in any fiscal 
    year, 15 percent shall be available solely for providing loan 
    assistance to public water systems which regularly serve fewer than 
    10,000 persons to the extent such funds can be obligated for 
    eligible projects of public water systems.

                           (3) Limitation

        (A) In general

            Except as provided in subparagraph (B), no assistance under 
        this section shall be provided to a public water system that--
                (i) does not have the technical, managerial, and 
            financial capability to ensure compliance with the 
            requirements of this subchapter; or
                (ii) is in significant noncompliance with any 
            requirement of a national primary drinking water regulation 
            or variance.

        (B) Restructuring

            A public water system described in subparagraph (A) may 
        receive assistance under this section if--
                (i) the use of the assistance will ensure compliance; 
            and
                (ii) if subparagraph (A)(i) applies to the system, the 
            owner or operator of the system agrees to undertake feasible 
            and appropriate changes in operations (including ownership, 
            management, accounting, rates, maintenance, consolidation, 
            alternative water supply, or other procedures) if the State 
            determines that the measures are necessary to ensure that 
            the system has the technical, managerial, and financial 
            capability to comply with the requirements of this 
            subchapter over the long term.

        (C) Review

            Prior to providing assistance under this section to a public 
        water system that is in significant noncompliance with any 
        requirement of a national primary drinking water regulation or 
        variance, the State shall conduct a review to determine whether 
        subparagraph (A)(i) applies to the system.

(b) Intended use plans

                           (1) In general

        After providing for public review and comment, each State that 
    has entered into a capitalization agreement pursuant to this section 
    shall annually prepare a plan that identifies the intended uses of 
    the amounts available to the State loan fund of the State.

                            (2) Contents

        An intended use plan shall include--
            (A) a list of the projects to be assisted in the first 
        fiscal year that begins after the date of the plan, including a 
        description of the project, the expected terms of financial 
        assistance, and the size of the community served;
            (B) the criteria and methods established for the 
        distribution of funds; and
            (C) a description of the financial status of the State loan 
        fund and the short-term and long-term goals of the State loan 
        fund.

                          (3) Use of funds

        (A) In general

            An intended use plan shall provide, to the maximum extent 
        practicable, that priority for the use of funds be given to 
        projects that--
                (i) address the most serious risk to human health;
                (ii) are necessary to ensure compliance with the 
            requirements of this subchapter (including requirements for 
            filtration); and
                (iii) assist systems most in need on a per household 
            basis according to State affordability criteria.

        (B) List of projects

            Each State shall, after notice and opportunity for public 
        comment, publish and periodically update a list of projects in 
        the State that are eligible for assistance under this section, 
        including the priority assigned to each project and, to the 
        extent known, the expected funding schedule for each project.

(c) Fund management

    Each State loan fund under this section shall be established, 
maintained, and credited with repayments and interest. The fund corpus 
shall be available in perpetuity for providing financial assistance 
under this section. To the extent amounts in the fund are not required 
for current obligation or expenditure, such amounts shall be invested in 
interest bearing obligations.

(d) Assistance for disadvantaged communities

                          (1) Loan subsidy

        Notwithstanding any other provision of this section, in any case 
    in which the State makes a loan pursuant to subsection (a)(2) of 
    this section to a disadvantaged community or to a community that the 
    State expects to become a disadvantaged community as the result of a 
    proposed project, the State may provide additional subsidization 
    (including forgiveness of principal).

                    (2) Total amount of subsidies

        For each fiscal year, the total amount of loan subsidies made by 
    a State pursuant to paragraph (1) may not exceed 30 percent of the 
    amount of the capitalization grant received by the State for the 
    year.

               (3) ``Disadvantaged community'' defined

        In this subsection, the term ``disadvantaged community'' means 
    the service area of a public water system that meets affordability 
    criteria established after public review and comment by the State in 
    which the public water system is located. The Administrator may 
    publish information to assist States in establishing affordability 
    criteria.

(e) State contribution

    Each agreement under subsection (a) of this section shall require 
that the State deposit in the State loan fund from State moneys an 
amount equal to at least 20 percent of the total amount of the grant to 
be made to the State on or before the date on which the grant payment is 
made to the State, except that a State shall not be required to deposit 
such amount into the fund prior to the date on which each grant payment 
is made for fiscal years 1994, 1995, 1996, and 1997 if the State 
deposits the State contribution amount into the State loan fund prior to 
September 30, 1999.

(f) Types of assistance

    Except as otherwise limited by State law, the amounts deposited into 
a State loan fund under this section may be used only--
        (1) to make loans, on the condition that--
            (A) the interest rate for each loan is less than or equal to 
        the market interest rate, including an interest free loan;
            (B) principal and interest payments on each loan will 
        commence not later than 1 year after completion of the project 
        for which the loan was made, and each loan will be fully 
        amortized not later than 20 years after the completion of the 
        project, except that in the case of a disadvantaged community 
        (as defined in subsection (d)(3) of this section), a State may 
        provide an extended term for a loan, if the extended term--
                (i) terminates not later than the date that is 30 years 
            after the date of project completion; and
                (ii) does not exceed the expected design life of the 
            project;

            (C) the recipient of each loan will establish a dedicated 
        source of revenue (or, in the case of a privately owned system, 
        demonstrate that there is adequate security) for the repayment 
        of the loan; and
            (D) the State loan fund will be credited with all payments 
        of principal and interest on each loan;

        (2) to buy or refinance the debt obligation of a municipality or 
    an intermunicipal or interstate agency within the State at an 
    interest rate that is less than or equal to the market interest rate 
    in any case in which a debt obligation is incurred after July 1, 
    1993;
        (3) to guarantee, or purchase insurance for, a local obligation 
    (all of the proceeds of which finance a project eligible for 
    assistance under this section) if the guarantee or purchase would 
    improve credit market access or reduce the interest rate applicable 
    to the obligation;
        (4) as a source of revenue or security for the payment of 
    principal and interest on revenue or general obligation bonds issued 
    by the State if the proceeds of the sale of the bonds will be 
    deposited into the State loan fund; and
        (5) to earn interest on the amounts deposited into the State 
    loan fund.

(g) Administration of State loan funds

                (1) Combined financial administration

        Notwithstanding subsection (c) of this section, a State may (as 
    a convenience and to avoid unnecessary administrative costs) 
    combine, in accordance with State law, the financial administration 
    of a State loan fund established under this section with the 
    financial administration of any other revolving fund established by 
    the State if otherwise not prohibited by the law under which the 
    State loan fund was established and if the Administrator determines 
    that--
            (A) the grants under this section, together with loan 
        repayments and interest, will be separately accounted for and 
        used solely for the purposes specified in subsection (a) of this 
        section; and
            (B) the authority to establish assistance priorities and 
        carry out oversight and related activities (other than financial 
        administration) with respect to assistance remains with the 
        State agency having primary responsibility for administration of 
        the State program under section 300g-2 of this title, after 
        consultation with other appropriate State agencies (as 
        determined by the State): Provided, That in nonprimacy States 
        eligible to receive assistance under this section, the Governor 
        shall determine which State agency will have authority to 
        establish priorities for financial assistance from the State 
        loan fund.

                   (2) Cost of administering fund

        Each State may annually use up to 4 percent of the funds 
    allotted to the State under this section to cover the reasonable 
    costs of administration of the programs under this section, 
    including the recovery of reasonable costs expended to establish a 
    State loan fund which are incurred after August 6, 1996, and to 
    provide technical assistance to public water systems within the 
    State. For fiscal year 1995 and each fiscal year thereafter, each 
    State may use up to an additional 10 percent of the funds allotted 
    to the State under this section--
            (A) for public water system supervision programs under 
        section 300j-2(a) of this title;
            (B) to administer or provide technical assistance through 
        source water protection programs;
            (C) to develop and implement a capacity development strategy 
        under section 300g-9(c) of this title; and
            (D) for an operator certification program for purposes of 
        meeting the requirements of section 300g-8 of this title,

    if the State matches the expenditures with at least an equal amount 
    of State funds. At least half of the match must be additional to the 
    amount expended by the State for public water supervision in fiscal 
    year 1993. An additional 2 percent of the funds annually allotted to 
    each State under this section may be used by the State to provide 
    technical assistance to public water systems serving 10,000 or fewer 
    persons in the State. Funds utilized under subparagraph (B) shall 
    not be used for enforcement actions.

                    (3) Guidance and regulations

        The Administrator shall publish guidance and promulgate 
    regulations as may be necessary to carry out the provisions of this 
    section, including--
            (A) provisions to ensure that each State commits and expends 
        funds allotted to the State under this section as efficiently as 
        possible in accordance with this subchapter and applicable State 
        laws;
            (B) guidance to prevent waste, fraud, and abuse; and
            (C) guidance to avoid the use of funds made available under 
        this section to finance the expansion of any public water system 
        in anticipation of future population growth.

    The guidance and regulations shall also ensure that the States, and 
    public water systems receiving assistance under this section, use 
    accounting, audit, and fiscal procedures that conform to generally 
    accepted accounting standards.

                          (4) State report

        Each State administering a loan fund and assistance program 
    under this subsection shall publish and submit to the Administrator 
    a report every 2 years on its activities under this section, 
    including the findings of the most recent audit of the fund and the 
    entire State allotment. The Administrator shall periodically audit 
    all State loan funds established by, and all other amounts allotted 
    to, the States pursuant to this section in accordance with 
    procedures established by the Comptroller General.

(h) Needs survey

    The Administrator shall conduct an assessment of water system 
capital improvement needs of all eligible public water systems in the 
United States and submit a report to the Congress containing the results 
of the assessment within 180 days after August 6, 1996, and every 4 
years thereafter.

(i) Indian Tribes

                           (1) In general

        1\1/2\ percent of the amounts appropriated annually to carry out 
    this section may be used by the Administrator to make grants to 
    Indian Tribes and Alaska Native villages that have not otherwise 
    received either grants from the Administrator under this section or 
    assistance from State loan funds established under this section. The 
    grants may only be used for expenditures by tribes and villages for 
    public water system expenditures referred to in subsection (a)(2) of 
    this section.

                          (2) Use of funds

        Funds reserved pursuant to paragraph (1) shall be used to 
    address the most significant threats to public health associated 
    with public water systems that serve Indian Tribes, as determined by 
    the Administrator in consultation with the Director of the Indian 
    Health Service and Indian Tribes.

                     (3) Alaska Native villages

        In the case of a grant for a project under this subsection in an 
    Alaska Native village, the Administrator is also authorized to make 
    grants to the State of Alaska for the benefit of Native villages. An 
    amount not to exceed 4 percent of the grant amount may be used by 
    the State of Alaska for project management.

                        (4) Needs assessment

        The Administrator, in consultation with the Director of the 
    Indian Health Service and Indian Tribes, shall, in accordance with a 
    schedule that is consistent with the needs surveys conducted 
    pursuant to subsection (h) of this section, prepare surveys and 
    assess the needs of drinking water treatment facilities to serve 
    Indian Tribes, including an evaluation of the public water systems 
    that pose the most significant threats to public health.

(j) Other areas

    Of the funds annually available under this section for grants to 
States, the Administrator shall make allotments in accordance with 
section 300j-2(a)(4) of this title for the Virgin Islands, the 
Commonwealth of the Northern Mariana Islands, American Samoa, and Guam. 
The grants allotted as provided in this subsection may be provided by 
the Administrator to the governments of such areas, to public water 
systems in such areas, or to both, to be used for the public water 
system expenditures referred to in subsection (a)(2) of this section. 
The grants, and grants for the District of Columbia, shall not be 
deposited in State loan funds. The total allotment of grants under this 
section for all areas described in this subsection in any fiscal year 
shall not exceed 0.33 percent of the aggregate amount made available to 
carry out this section in that fiscal year.

(k) Other authorized activities

                           (1) In general

        Notwithstanding subsection (a)(2) of this section, a State may 
    take each of the following actions:
            (A) Provide assistance, only in the form of a loan, to one 
        or more of the following:
                (i) Any public water system described in subsection 
            (a)(2) of this section to acquire land or a conservation 
            easement from a willing seller or grantor, if the purpose of 
            the acquisition is to protect the source water of the system 
            from contamination and to ensure compliance with national 
            primary drinking water regulations.
                (ii) Any community water system to implement local, 
            voluntary source water protection measures to protect source 
            water in areas delineated pursuant to section 300j-13 of 
            this title, in order to facilitate compliance with national 
            primary drinking water regulations applicable to the system 
            under section 300g-1 of this title or otherwise 
            significantly further the health protection objectives of 
            this subchapter. Funds authorized under this clause may be 
            used to fund only voluntary, incentive-based mechanisms.
                (iii) Any community water system to provide funding in 
            accordance with section 300j-14(a)(1)(B)(i) of this title.

            (B) Provide assistance, including technical and financial 
        assistance, to any public water system as part of a capacity 
        development strategy developed and implemented in accordance 
        with section 300g-9(c) of this title.
            (C) Make expenditures from the capitalization grant of the 
        State for fiscal years 1996 and 1997 to delineate and assess 
        source water protection areas in accordance with section 300j-13 
        of this title, except that funds set aside for such expenditure 
        shall be obligated within 4 fiscal years.
            (D) Make expenditures from the fund for the establishment 
        and implementation of wellhead protection programs under section 
        300h-7 of this title.

                           (2) Limitation

        For each fiscal year, the total amount of assistance provided 
    and expenditures made by a State under this subsection may not 
    exceed 15 percent of the amount of the capitalization grant received 
    by the State for that year and may not exceed 10 percent of that 
    amount for any one of the following activities:
            (A) To acquire land or conservation easements pursuant to 
        paragraph (1)(A)(i).
            (B) To provide funding to implement voluntary, incentive-
        based source water quality protection measures pursuant to 
        clauses (ii) and (iii) of paragraph (1)(A).
            (C) To provide assistance through a capacity development 
        strategy pursuant to paragraph (1)(B).
            (D) To make expenditures to delineate or assess source water 
        protection areas pursuant to paragraph (1)(C).
            (E) To make expenditures to establish and implement wellhead 
        protection programs pursuant to paragraph (1)(D).

                     (3) Statutory construction

        Nothing in this section creates or conveys any new authority to 
    a State, political subdivision of a State, or community water system 
    for any new regulatory measure, or limits any authority of a State, 
    political subdivision of a State or community water system.

(l) Savings

    The failure or inability of any public water system to receive funds 
under this section or any other loan or grant program, or any delay in 
obtaining the funds, shall not alter the obligation of the system to 
comply in a timely manner with all applicable drinking water standards 
and requirements of this subchapter.

(m) Authorization of appropriations

    There are authorized to be appropriated to carry out the purposes of 
this section $599,000,000 for the fiscal year 1994 and $1,000,000,000 
for each of the fiscal years 1995 through 2003. To the extent amounts 
authorized to be appropriated under this subsection in any fiscal year 
are not appropriated in that fiscal year, such amounts are authorized to 
be appropriated in a subsequent fiscal year (prior to the fiscal year 
2004). Such sums shall remain available until expended.

(n) Health effects studies

    From funds appropriated pursuant to this section for each fiscal 
year, the Administrator shall reserve $10,000,000 for health effects 
studies on drinking water contaminants authorized by the Safe Drinking 
Water Act Amendments of 1996. In allocating funds made available under 
this subsection, the Administrator shall give priority to studies 
concerning the health effects of cryptosporidium (as authorized by 
section 300j-18(c) of this title), disinfection byproducts (as 
authorized by section 300j-18(c) of this title), and arsenic (as 
authorized by section 300g-1(b)(12)(A) of this title), and the 
implementation of a plan for studies of subpopulations at greater risk 
of adverse effects (as authorized by section 300j-18(a) of this title).

(o) Monitoring for unregulated contaminants

    From funds appropriated pursuant to this section for each fiscal 
year beginning with fiscal year 1998, the Administrator shall reserve 
$2,000,000 to pay the costs of monitoring for unregulated contaminants 
under section 300j-4(a)(2)(C) of this title.

(p) Demonstration project for State of Virginia

    Notwithstanding the other provisions of this section limiting the 
use of funds deposited in a State loan fund from any State allotment, 
the State of Virginia may, as a single demonstration and with the 
approval of the Virginia General Assembly and the Administrator, conduct 
a program to demonstrate alternative approaches to intergovernmental 
coordination to assist in the financing of new drinking water facilities 
in the following rural communities in southwestern Virginia where none 
exists on August 6, 1996, and where such communities are experiencing 
economic hardship: Lee County, Wise County, Scott County, Dickenson 
County, Russell County, Buchanan County, Tazewell County, and the city 
of Norton, Virginia. The funds allotted to that State and deposited in 
the State loan fund may be loaned to a regional endowment fund for the 
purpose set forth in this subsection under a plan to be approved by the 
Administrator. The plan may include an advisory group that includes 
representatives of such counties.

(q) Small system technical assistance

    The Administrator may reserve up to 2 percent of the total funds 
appropriated pursuant to subsection (m) of this section for each of the 
fiscal years 1997 through 2003 to carry out the provisions of section 
300j-1(e) of this title (relating to technical assistance for small 
systems), except that the total amount of funds made available for such 
purpose in any fiscal year through appropriations (as authorized by 
section 300j-1(e) of this title) and reservations made pursuant to this 
subsection shall not exceed the amount authorized by section 300j-1(e) 
of this title.

(r) Evaluation

    The Administrator shall conduct an evaluation of the effectiveness 
of the State loan funds through fiscal year 2001. The evaluation shall 
be submitted to the Congress at the same time as the President submits 
to the Congress, pursuant to section 1108 of title 31, an appropriations 
request for fiscal year 2003 relating to the budget of the Environmental 
Protection Agency.

(July 1, 1944, ch. 373, title XIV, Sec. 1452, as added Pub. L. 104-182, 
title I, Sec. 130, Aug. 6, 1996, 110 Stat. 1662.)

                       References in Text

    The Safe Drinking Water Act Amendments of 1996, referred to in 
subsec. (n), is Pub. L. 104-182, Aug. 6, 1996, 110 Stat. 1613. For 
complete classification of this Act to the Code, see Short Title of 1996 
Amendment note set out under section 201 of this title and Tables.


        Combining Fund Assets for Enhancement of Lending Capacity

    Pub. L. 105-276, title III, Oct. 21, 1998, 112 Stat. 2498, provided 
in part: ``That, consistent with section 1452(g) of the Safe Drinking 
Water Act (42 U.S.C. 300j-12(g)), section 302 of the Safe Drinking Water 
Act Amendments of 1996 (Public Law 104-182) [set out as a note below] 
and the accompanying joint explanatory statement of the committee of 
conference (H. Rept. No. 104-741 to accompany S. 1316, the Safe Drinking 
Water Act Amendments of 1996), and notwithstanding any other provision 
of law, beginning in fiscal year 1999 and thereafter, States may combine 
the assets of State Revolving Funds (SRFs) established under section 
1452 of the Safe Drinking Water Act, as amended, and title VI of the 
Federal Water Pollution Control Act [33 U.S.C. 1381 et seq.], as 
amended, as security for bond issues to enhance the lending capacity of 
one or both SRFs, but not to acquire the state match for either program, 
provided that revenues from the bonds are allocated to the purposes of 
the Safe Drinking Water Act [this subchapter] and the Federal Water 
Pollution Control Act [33 U.S.C. 1251 et seq.] in the same portion as 
the funds are used as security for the bonds''.


                            Transfer of Funds

    Section 302 of Pub. L. 104-182 provided that:
    ``(a) In General.--Notwithstanding any other provision of law, at 
any time after the date 1 year after a State establishes a State loan 
fund pursuant to section 1452 of the Safe Drinking Water Act [this 
section] but prior to fiscal year 2002, a Governor of the State may--
        ``(1) reserve up to 33 percent of a capitalization grant made 
    pursuant to such section 1452 and add the funds reserved to any 
    funds provided to the State pursuant to section 601 of the Federal 
    Water Pollution Control Act (33 U.S.C. 1381); and
        ``(2) reserve in any year a dollar amount up to the dollar 
    amount that may be reserved under paragraph (1) for that year from 
    capitalization grants made pursuant to section 601 of such Act (33 
    U.S.C. 1381) and add the reserved funds to any funds provided to the 
    State pursuant to section 1452 of the Safe Drinking Water Act.
    ``(b) Report.--Not later than 4 years after the date of enactment of 
this Act [Aug. 6, 1996], the Administrator shall submit a report to the 
Congress regarding the implementation of this section, together with the 
Administrator's recommendations, if any, for modifications or 
improvement.
    ``(c) State Match.--Funds reserved pursuant to this section shall 
not be considered to be a State match of a capitalization grant required 
pursuant to section 1452 of the Safe Drinking Water Act or the Federal 
Water Pollution Control Act (33 U.S.C. 1251 et seq.).''

                  Section Referred to in Other Sections

    This section is referred to in sections 300f, 300g-4, 300g-5, 300g-
8, 300g-9, 300j-1, 300j-2, 300j-3c, 300j-4, 300j-13, 300j-14, 300j-15, 
300j-18 of this title.
