42 U.S.C. § 300j–3 — Special project grants and guaranteed loans

(a) Study and demonstration grants: The EPA may give grants to any person to help develop and demonstrate — including build — projects that either (1) show off a new or better way to give the public a dependably safe supply of drinking water, or (2) study and demonstrate the health effects of reclaiming, recycling, and reusing wastewater for drinking, and the methods for making that water safe. (b) Limits on those grants: A grant can't cover more than 66⅔ percent of a facility's construction cost, or more than 75 percent of any other cost, as the EPA decides. A grant for building or changing facilities for a public water system can't be made unless the state agency in charge of drinking water safety has approved the project (or, if a state has no such agency, the state health authority). The EPA also can't make a grant unless it decides, after consulting the National Drinking Water Advisory Council, that the project serves a real purpose in developing new or better techniques for safe drinking water. Priority goes to projects addressing known or possible public health hazards that need advanced technology to remove particles too small for ordinary treatment to catch. (c) Funding: Congress could spend $7,500,000 for the fiscal year ending June 30, 1975; $7,500,000 for the year ending June 30, 1976; and $10,000,000 for the year ending June 30, 1977. (d) Loan guarantees: During the fiscal years ending June 30, 1975 and June 30, 1976, the EPA had to run a program guaranteeing private loans to small public water systems, so they could afford to meet national primary drinking water rules. The EPA could guarantee a loan only if the system couldn't reasonably get the needed money any other way, and only if the EPA decided the facilities built with the loan wouldn't likely become outdated by future rule changes. No single system could have more than $50,000 in guaranteed debt, and the total guaranteed across all systems couldn't exceed $50,000,000. The EPA had to write regulations to carry this out.