House panel passes bill to create loan fund program aimed at drinking water systems.

WASHINGTON -- The House Energy and Commerce Committee yesterday overwhelmingly approved legislation that would create a revolving loan program that states can use to finance construction and modernization of drinking water treatment systems.

The bill, which passed 43 to 1. would reauthorize the Safe Drinking Water Act through fiscal 1997 and authorize $3.6 billion for the state revolving loan funds.

Final approval of the bill would also release $599 million for the new loan program that was set aside in the current fiscal year, which ends Sept. 30.

Even though the bill calls for spending $1 billion for the loan program next year, President Clinton's fiscal 1995 budget requested only $700 million. The House and Senate Appropriations Committees authorized $700 million for the new state revolving loan funds, and the House approved the level last week. The Senate is expected to follow suit.

The revolving fund program would permit states to leverage their federal dollars by issuing tax-exempt bonds, much as they do now with the wastewater treatment funds authorized by the Clean Water Act.

House committee members worked for months on the bipartisan compromise bill they approved today, said Rep. Henry Waxman, D-Calif., chairman of the Energy and Commerce subcommittee on health and the environment.

The drinking water bill was unanimously approved at the subcommittee level earlier in the day.

The compromise bill has the support of a wide coalition of groups, including those interests representing state and local elected officials, local water authorities, and environmental groups, Waxman said.

As Congress moved closer to its October adjournment date, many sources said the bill was doomed because of various controversial environmental provisions.

But the deal breaker came Monday afternoon, when the committee agreed to drop a provision allowing citizens to sue state and local water authorities, said Diane Shea of the National Association of Counties.

"lt's not everything we asked for, but we think we can live with it. On balance it's more good than bad," Shea said.

Some committee members saw passage of the bill as a way to clean the legislative slate for the new Congress.

"We can at least get this issue behind us and have one less thing" to deal with next year, said Rep. Thomas Bliley, R-Va., ranking Republican on the health and environment subcommittee.

The House bill would modify a provision requiring states to identify 25 new contaminants every three years, a requirement states found extremely cumbersome and expensive. The new regulations would focus on those contaminants associated with the greatest health threats.

The bill would also give small systems more help through funds for technical assistance and guidelines for technologies suitable to those systems.

The Senate approved its version of the drinking water bill in May, also authorizing $1 billion annually to the revolving loan funds. The Senate version would reauthorize the bill through fiscal 2000.

Once the bill is passed by the full House, a compromise will have to be struck between the two versions. House sources said they hope the Senate will accept the House language and avoid a drawn-out conference.

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