S. 1961, Chemical Safety and Drinking Water Protection Act of 2014

Cost Estimate
June 5, 2014

As ordered reported by the Senate Committee on Environment and Public Works on April 3, 2014

S. 1961 would amend the Safe Drinking Water Act (SDWA) to require either the Environmental Protection Agency (EPA) or those states with primary enforcement authority for public water systems to carry out a program to protect surface water from contamination by chemical storage tanks. Under this legislation, however, states would have the option to not establish the proposed program; if states opt out of running the program, then authority to implement it would revert to EPA.

Based on information from EPA, various state agencies, and experts in the storage tank industry, CBO estimates that implementing this legislation would cost $114 million over the 2015-2109 period, subject to the availability of appropriated funds. That estimate assumes that all but about 10 state, tribal, or territorial governments would probably implement their own programs to oversee chemical storage tanks. EPA would implement the program with federal funds for state, tribal, or territorial governments that opt not to do so. Enacting S. 1961 would not affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply.

S. 1961 would impose intergovernmental and private-sector mandates, as defined in the Unfunded Mandates Reform Act (UMRA), on owners and operators of some chemical storage tanks. Those owners and operators would have to meet requirements established by EPA and states, including standards for construction, spill prevention, and emergency response. Owners and operators also would have to comply with requirements for periodic inspections. The cost of the mandates would ultimately depend on the minimum requirements developed by EPA and states, but they would affect a large number of entities. Only a small number of the chemical storage tanks owned by public entities would be affected by the program’s requirements; therefore, CBO estimates that the cost of mandates for public entities would fall below the annual threshold established in UMRA for intergovernmental mandates ($76 million in 2014, adjusted annually for inflation). However, a large number of private entities would be affected by the program. Given the potential costs of compliance for those entities, CBO estimates that the aggregate cost of the private-sector mandates would probably exceed the annual threshold established in UMRA ($152 million in 2014, adjusted annually for inflation).