text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Clean Water Affordability Act of 
  2014''.
  
  SEC. 2. INTEGRATED PERMITTING PROCESS.
  
      (a) In General.--Section 402(a) of the Federal Water Pollution 
  Control Act (33 U.S.C. 1342(a)) is amended by adding at the end the 
  following:
              ``(6) Integrated permits.--
                      ``(A) Definition of publicly owned permittee.--In 
                  this paragraph, the term `publicly owned permittee' 
                  means either--
                              ``(i) a treatment works (as defined in 
                          section 212) that is publicly owned; or
                              ``(ii) a municipal separate storm sewer 
                          system referred to in this section.
                      ``(B) Planning approach.--The Administrator shall 
                  establish a comprehensive and integrated planning 
                  approach to the obligations under this section of a 
                  publicly owned permittee--
                              ``(i) under which permit obligations may be 
                          implemented according to a schedule that--
                                      ``(I) accounts for the financial 
                                  capability of the publicly owned 
                                  permittee;
                                      ``(II) prioritizes permit 
                                  obligations according to the most cost-
                                  effective and environmentally 
                                  beneficial outcomes;
                                      ``(III) accounts for the 
                                  preexisting maintenance, operational, 
                                  and regulatory obligations of the 
                                  publicly owned permittee under this 
                                  section; and
                                      ``(IV) enables the publicly owned 
                                  permittee to implement innovative 
                                  approaches to meet those obligations; 
                                  and
                              ``(ii) that accounts for changed 
                          circumstances in the obligations of the 
                          publicly owned permittee, such as--
                                      ``(I) new innovative treatment 
                                  approaches;
                                      ``(II) new regulatory requirements; 
                                  and
                                      ``(III) changes in financial 
                                  capability.''.
      (b) Duration of Permits.--Section 402(b)(1)(B) of the Federal Water 
  Pollution Control Act (33 U.S.C. 1342(b)(1)(B)) is amended by inserting 
  before the semicolon at the end the following: ``, except that a permit 
  with a term of more than 5 years but not more than 25 years may be 
  approved if the permittee has an approved integrated plan established 
  under subsection (a)(6)''.
  
  SEC. 3. UPDATING OF GUIDANCE.
  
      (a) Definitions.--In this section, the following definitions apply:
              (1) Administrator.--The term ``Administrator'' means the 
          Administrator of the Environmental Protection Agency.
              (2) Affordability.--The term ``affordability'' means, with 
          respect to payment of a utility bill, a measure of whether an 
          individual customer or household can pay the bill without undue 
          hardship or unreasonable sacrifice in the essential lifestyle 
          or spending patterns of the individual or household, as 
          determined by the Administrator.
              (3) Financial capability.--The term ``financial 
          capability'' means the financial capability of a community to 
          make investments necessary to make water quality-related 
          improvements, taking into consideration the criteria described 
          in subsection (b)(2)(A).
              (4) Guidance.--The term ``guidance'' means the guidance 
          published by the Administrator entitled ``Combined Sewer 
          Overflows--Guidance for Financial Capability Assessment and 
          Schedule Development'' and dated February 1997, as applicable 
          to combined sewer overflows and sanitary sewer overflows.
      (b) Updating.--
              (1) In general.--Not later than 1 year after the date of 
          enactment of this Act, the Administrator shall update the 
          guidance to ensure that the evaluations by the Administrator of 
          financial capability assessment and schedule development meet 
          the criteria described in paragraph (2).
              (2) Criteria.--The criteria described in this paragraph are 
          that, under the updated guidance--
                      (A) in assessing the financial capability of a 
                  community--
                              (i) greater emphasis should be placed on 
                          local economic conditions;
                              (ii) for regional systems, consideration 
                          should be given to the economic conditions of 
                          political jurisdictions and significant 
                          demographic groups within each region;
                              (iii) prescriptive formulas for use in 
                          calculating financial capability and thresholds 
                          for expenditure should not be considered to be 
                          the only indicator of the financial capability 
                          of a community;
                              (iv) site-specific local conditions should 
                          be taken into consideration in analyzing 
                          financial capability;
                              (v) a single measure of financial 
                          capability or affordability (such as median 
                          household income) should be viewed in the 
                          context of other economic measures, rather than 
                          as a threshold to be achieved; and
                              (vi)(I) consideration should be given to 
                          the economic outlook of a community, including 
                          the potential impact of program requirements 
                          over time, in the development of implementation 
                          schedules; and
                              (II) the assessment should take into 
                          consideration other essential community 
                          investments relating to water quality 
                          improvements;
                      (B) with respect to the timing of implementation of 
                  water quality-related improvements--
                              (i) environmental improvement 
                          implementation schedules should be structured 
                          to mitigate the potential adverse impact on 
                          distressed populations resulting from the costs 
                          of the improvements;
                              (ii) implementation schedules should 
                          reflect local community financial conditions 
                          and economic impacts;
                              (iii) implementation schedules should allow 
                          permittees up to 30 years to implement water 
                          quality-related improvements in appropriate 
                          cases in which the cost of implementing the 
                          improvements places a high financial burden on 
                          the permittee; and
                              (iv) existing implementation schedules 
                          should be modified in appropriate cases taking 
                          into consideration the criteria set forth in 
                          this subparagraph;
                      (C) with respect to implementation--
                              (i) a determination of local financial 
                          capability may be achieved through an 
                          evaluation of an array of factors the relative 
                          importance of which may vary across regions and 
                          localities; and
                              (ii) an appropriate methodology should give 
                          consideration to such various factors as are 
                          appropriate to recognize the prevailing and 
                          projected economic concerns in a community; and
                      (D) the residential indicator should be revised to 
                  include--
                              (i) a consideration of costs imposed upon 
                          ratepayers for essential utilities;
                              (ii) increased consideration and 
                          quantification of local community-imposed costs 
                          in regional systems;
                              (iii) a mechanism to assess impacts on 
                          communities with disparate economic conditions 
                          throughout the entire service area of a 
                          utility;
                              (iv) a consideration of the industrial and 
                          population trends of a community;
                              (v) recognition that--
                                      (I) the median household income of 
                                  a service area reflects a numerical 
                                  median rather than the distribution of 
                                  incomes within the service area; and
                                      (II) more representative methods of 
                                  determining affordability, such as 
                                  shelter costs, essential utility 
                                  payments, State affordability criteria, 
                                  and State and local tax efforts, should 
                                  be considered;
                              (vi) a consideration of low-income 
                          ratepayer percentages; and
                              (vii) impacts relating to program delivery, 
                          such as water quality infrastructure market 
                          saturation and program management.
              (3) Implementation.--The updated guidance should indicate 
          that, in a case in which a previously approved long-term 
          control plan or associated enforceable agreement does not 
          prohibit modification of the plan or terms of the agreement 
          (including financial capability considerations), and all 
          parties are in agreement that a change is needed or that the 
          plan or agreement does not prohibit reopening to address 
          changes in the economic or financial status of the community 
          since the effective date of the plan or agreement, 
          reconsideration and modification of financial capability 
          determinations and implementation schedules based on the 
          criteria described in paragraph (2) is appropriate.
              (4) Applicability.--The Administrator shall apply the 
          updated guidance, including the criteria described in paragraph 
          (2), to each determination and analysis of affordability, 
          financial capability, or widespread and substantial economic 
          impact related to implementation of a program under the Federal 
          Water Pollution Control Act (33 U.S.C. 1251 et seq.).
      (c) Publication and Submission.--Upon completion of the updating of 
  guidance under subsection (b), the Administrator shall publish in the 
  Federal Register and submit to the Committee on Environment and Public 
  Works of the Senate and the Committee on Transportation and 
  Infrastructure of the House of Representatives the updated guidance.
  
  SEC. 4. CAPITALIZATION GRANT AGREEMENTS.
  
      Section 602(b) of the Federal Water Pollution Control Act (33 
  U.S.C. 1382(b)) is amended--
              (1) by striking ``and'' at the end of paragraph (9);
              (2) by striking the period at the end of paragraph (10) and 
          inserting ``; and''; and
              (3) by adding at the end the following:
              ``(11) the State will use at least 15 percent of the amount 
          of each capitalization grant received by the State under this 
          title after September 30, 2015, to provide assistance to 
          municipalities of fewer than 10,000 individuals that meet the 
          affordability criteria established by the State under section 
          603(i)(2) for activities included on the State's priority list 
          established under section 603(g), to the extent that there are 
          sufficient applications for such assistance.''.
  
  SEC. 5. WATER POLLUTION CONTROL REVOLVING LOAN FUNDS.
  
      (a) Extended Repayment Period.--Section 603(d)(1) of the Federal 
  Water Pollution Control Act (33 U.S.C. 1383(d)(1)) is amended--
              (1) in subparagraph (A) by striking ``20 years'' and 
          inserting ``the lesser of 30 years or the design life of the 
          project to be financed with the proceeds of the loan''; and
              (2) in subparagraph (B) by striking ``not later than 20 
          years after project completion'' and inserting ``upon the 
          expiration of the term of the loan''.
      (b) Additional Subsidization.--Section 603 of such Act (33 U.S.C. 
  1383) is amended by adding at the end the following:
      ``(i) Additional Subsidization.--
              ``(1) In general.--In any case in which a State provides 
          assistance to a municipality or intermunicipal, interstate, or 
          State agency under subsection (d), the State may provide 
          additional subsidization, including forgiveness of principal, 
          negative interest loans, and grants to benefit a municipality 
          that--
                      ``(A) meets the State's affordability criteria 
                  established under paragraph (2); or
                      ``(B) does not meet the State's affordability 
                  criteria if the recipient--
                              ``(i) seeks additional subsidization to 
                          benefit individual ratepayers in the 
                          residential user rate class; and
                              ``(ii) demonstrates to the State that such 
                          ratepayers will experience a significant 
                          hardship from the increase in rates necessary 
                          to finance the project or activity for which 
                          assistance is sought.
              ``(2) Affordability criteria.--
                      ``(A) Establishment.--On or before September 30, 
                  2015, and after providing notice and an opportunity for 
                  public comment, a State shall establish affordability 
                  criteria to assist in identifying municipalities that 
                  would experience a significant hardship raising the 
                  revenue necessary to finance a project or activity 
                  eligible for assistance under section 603(c)(1) if 
                  additional subsidization is not provided. Such criteria 
                  shall be based on income data, population trends, and 
                  other data determined relevant by the State, including 
                  whether the project or activity is to be carried out in 
                  an economically distressed area, as described in 
                  section 301 of the Public Works and Economic 
                  Development Act of 1965 (42 U.S.C. 3161).
                      ``(B) Existing criteria.--If a State has previously 
                  established, after providing notice and an opportunity 
                  for public comment, affordability criteria that meet 
                  the requirements of subparagraph (A), the State may use 
                  the criteria for the purposes of this subsection. For 
                  purposes of this Act, any such criteria shall be 
                  treated as affordability criteria established under 
                  this paragraph.
                      ``(C) Information to assist states.--The 
                  Administrator may publish information to assist States 
                  in establishing affordability criteria under 
                  subparagraph (A).
              ``(3) Use of capitalization grants.--A State shall use not 
          less than 20 percent but not more than 30 percent of the amount 
          of the capitalization grants received by the State under this 
          title in fiscal years beginning after September 30, 2015, to 
          provide additional subsidization to eligible recipients under 
          paragraph (1).''.
target: Clean Water Affordability Act of 2014 - Amends the Federal Water Pollution Control Act (commonly known as the Clean Water Act) to require the Administrator of the Environmental Protection Agency (EPA) to establish a comprehensive and integrated planning approach to the obligations concerning permits for pollutant discharges of a publicly owned permittee. Defines such a permittee as a treatment works that is publicly owned or a municipal separate storm sewer system.  Requires the approach to such obligations to: (1) include requirements for a schedule under which they may be implemented, and (2) account for changed circumstances in the obligations of the publicly owned permittee. Allows approval of a permit under a state-administered program with a term of more than 5 but no more than 25 years if the permittee has an integrated plan approved under this Act. Requires the Administrator to update the guidance entitled &quot;Combined Sewer Overflows--Guidance for Financial Capability Assessment and Schedule Development,&quot; dated February 1997, to ensure that the evaluations by the Administrator of financial capability assessment and schedule development meet specified criteria, including criteria used in: (1) assessing financial capability of a community to make investments necessary to make water quality-related improvements, and (2) implementing water quality-related improvements.  Revises requirements for capitalization grant agreements with states for establishing water pollution control revolving funds. Requires states to set aside 15% of funds for assistance to municipalities of fewer than 10,000 individuals that meet specified affordability criteria. Authorizes the fund to be used to make loans at terms not to exceed 30 years or the design life of the project to be financed with the proceeds of the loan (currently 20 years). Authorizes a state to provide additional subsidization, including forgiveness of principal, negative interest loans, and grants to benefit a municipality that: (1) meets affordability criteria, or (2) does not meet such criteria if the recipient seeks the additional subsidization to benefit ratepayers that will experience a significant hardship from the increase in rates necessary to finance the project or activity for which assistance is sought. Establishes affordability criteria to assist in identifying municipalities that would experience a significant hardship raising the revenue necessary to finance a project or activity eligible for assistance.
feat_title: Clean Water Affordability Act of 2014