Senator DURENBURGER. Let me say to the last two witnesses that we are going to have to recess until about 3:10 which is about 7 minutes, and I will be right back.

[Short recess.]

Senator DURENBURGER. Gentlemen, thank you very much. C.J. Smith, secretary, the Association of Metropolitan Water Agencies and Ken Miller, chairman, American Water Works Association Research Foundation.

Thank you for being here. Your full statements will be made a part of the record, and we will proceed with Mr. Smith.

TESTIMONY OF C.J. SMITH, SECRETARY, ASSOCIATION OF METROPOLITAN WATER AGENCIES, AND KEN MILLER, CHAIRMAN AMERICAN WATER WORKS ASSOCIATION RESEARCH FOUNDATION

Mr. SMITH. Thank you, Mr. Chairman, I am C.J. Smith, secretary of the Association of Metropolitan Water Agencies and superintendent of the Bureau of Water in Knoxville, TN. I very much appreciate the opportunity to appear before you today on behalf of our member agencies.

The association was formed in 1981 to serve as a voice for publicly owned water supply agencies in the Nation's larger metropolitan areas. Member agencies of our association are responsible for providing high-quality, safe drinking water to more than 43 million people in 45 large cities.

Mr. Chairman, as the major conveyors of drinking water to the public in this country, we are extremely concerned about the quantity and quality of our Nation's water resources. As the demand for water continues to grow, as it undoubtedly will, it becomes increasingly important to take positive steps to protect and manage this vital resource.

In the past, Congress, States, as well as local officials have, for the most part, reacted to water problems instead of acting to prevent them. At the Federal level, many of our environmental statutes, including the Clean Water Act, Safe Drinking Water Act, as well as the Resources Conservation and Recovery Act and Superfund were enacted largely in response to the pressing problems of surface and groundwater contimination. It is time that we as a nation take the lead in water-related issues rather than reacting to problem situations. We believe that only through a broad-based, comprehensive research effort can we hope to accomplish this goal. We do not believe that wate research and study should rest solely with the Federal Government. Quite the contrary. AMWA has been working closely with the AMWA Research Foundation and National Association of Water Companies to develop a voluntary reseach assessment program funded by water utilities through their rate structure to ensure both scientific and technological advancements keep pace with the needs of the public and the drinking water supply community.

This effort, which is gaining wide support among both public and private water supplies, would address drinking water issues ranging from the implications of water treatment chemicals on water quality, protection and management of surface and ground water

to water distribution, infractructure, modernization, and system planning and financing.

We have some concern that the research foundation proposed in S. 904 would duplicate or be perceived as duplicating the efforts of the water utility community. At a time when budget constraints mandate that we spend wisely, we need to coordinate our efforts to cover as broad a spectrum of water resource-related issues as possible. Duplication of efforts simply wastes time and valuable resources and slows progress on other important water resoource issues.

Mr. Chairman, we believe that the foundation and the grant program provided for in S. 904 are intended to facilitate and not duplicate efforts such as the water supply community initiative. We appreciate the fact that S. 904 recognizes the importance of non-governmental research programs and pledges to encourage and work in cooperative with such efforts.

However, in order to promote the understanding that the proposed Research Foundation is not intended to duplicate ongoing or new efforts in the water research area, we recommend that the name of the Foundation be changed to the National Water Resources Research Planning Center and the grant program be set up to match funds generated by non-Federal research organizations. AMWA would be very happy to work with this subcommittee or your staff to work out legislative language along these lines.

AMWA commends this subcommittee for its interest and efforts in water research. We support the creation of the Water Research Foundation proposed in S. 904 with some modification. We believe that S. 904 would provide the framework for coordination and implementation of a comprehensive research planning program to address the multitude of complex issues which affect water resources in this country. We also support the creation of a water information clearinghouse to foster the exchange of information on all areas of water research.

Mr. Chairman, water resource problems have increased in both scope and complexity over the past several years. At the same time, Federal funding of water-related study has declined significantly. The grant program contained in S. 904 is greatly needed, not only to support existing research activities, but to facilitate new efforts such as the water utility research program. These funds could well provide the impetus for gaining additional financial support from all sectors of society and develop a true partnership, not only among the various levels of government, but the private sector, as well.

There is another aspect of water resource research which needs to be discussed, and that is the need for an entity like the proposed research foundation to focus on the larger picture; to coordinate planning and research for all aspects of water use, and to identify and support areas where research is now lacking.

The social, economic and technological changes taking place in this country mandate that we act to effectively manage our Nation's water resources. We need to begin to identify the water resource needs of today and to plan for the future. If we are to grow and prosper, we need answers to some of the basic but serious ques

tions. For example, what impact will population shifts have on the water resources of a given region?

In conclusion, Mr. Chairman, we believe the research foundation proposed in S. 904 could very well be the organization needed to put all the pieces of the puzzle together by promoting and supporting research efforts on specific water problems and by focusing on the broader picture of where we are headed and where we need to be in the water resource area. Thank you very much. Senator DURENBERGER. Thank you very much.

Mr. Miller?

Mr. MILLER. Thank you for the opportunity to testify on this bill, Mr. Chairman. I am Ken Miller, the current chairman of the board of trustees for the American Water Works Association Research Foundation. I have submitted my formal written statement for your review and will only highlight what I consider to be the five key points of that statement.

It is the water industry's opinion that the general thrust of the bill is an admirable one and one that will resolve many of the planning and policy problems that currently exist within the water resources arena. There is a definite need for the interdisciplinary and interregional studies proposed for this new water research foundation, and the industry welcomes another funding source in this neglected area.

An excellent example of this interdisciplinary need is in the arena of wastewater reuse as a future water supply resource; the lack of clear mandate for a study on the problem the Federal level has prevented the Government from being an active researcher in this field. Because of this the Denver Water Board has invested more than $30 million of its own money to investigate the resource potential of reuse to solve its future water needs. Even though the reuse research will help solve Denver's problems, its applicability nationwide and even worldwide is much greater than the local benefit.

This is a situation where Denver's research investment, which most water systems would not be unable to afford, is benefitting the industry even more than it is benefitting the city. The proposed Water Research Foundation would help to focus that type of effort and talent into a logical and effective research framework.

One of the concerns that we have with the bill as it is now written relates to the water industry's attempt to internally and voluntarily establish a comprehensive research program through a selfsupporting internal assessment effort. That internal effort is now at a delicate and sensitive stage and we are concerned that as the bill is currently written, the proposed foundation as it is currently defined by the bill would stymie or delay any further commitment by the utilities to a self-supportive system of research funding. There may be some within the industry who would use the proposed authorization as justification for letting the Federal Government fund the research for the industry rather than committing themselves to an industry supported effort.

In our statement, we have outlined two ways to avoid this possibility: First, a concurrent resolution adopted by Congress would send a clear signal to the water utilities that an internal assessment program is of national interest and concern. Second, a provi

sion could be added to the bill offering matching funds as a means of stimulating industry involvement.

This second provision would also key into another basic premise of Senate bill 904; that is the enhancement of existing research efforts within the industry and the prevention of any duplication of effort. As you know, the AWWA Research Foundation has made tremendous strides in the past few years in this area, and we look forward to the establishment of a research partnership with the proposed organizations.

To summarize our position, we commend the general purpose of the bill and pledge our cooperation. We ask that the water industry initiatives and our assessment effort be recognized and enhanced by congressional action-specifically a concurrent resolution—and by the proposed water research foundation through a matching funding provision that any duplicative programs or institutions be precluded.

Thank you very much, Mr. Chairman.

Senator DURENBERGER. Thank you both very much, and thank you for the thoroughness of your statement.

Let me see if I can get some idea from each of you that is a little more specific than your full statements about water resource research needs. We haven't gotten too specific on it. We have talked mainly about process and organization, and so forth. Could each of you react from your special perspectives about the current areas of inadequacy in the research area, where you think there ought to be research. Mr. Miller, you have made an interesting point, that we run the risk by having the research moneys coming from a governmental source but of not having, I think, you phased it was, a specific kind of-

Mr. MILLER. Voluntary assessment of the industry?

Senator DURENBERGER. Yes, and that there is a certain value to that, I take it, that you might want to address in your response to my question.

Mr. MILLER. Let me respond to that if I could, C.J.

Mr. SMITH. Fine.

Mr. MILLER. The electric industry is currently funding about $350 million worth of research a year through a small assessment on electrical utility rates. The gas industry operates a similar assessment program and funds about $170 million of research a year. The water industry's centralized research effort through AWWA has grown from $75,000 in funding in 1980 to $500,000 in 1983 to over $2 million this year. We hope to increase our funding level to over $3 million in 1986, again with the help of a million-dollar grant from the Federal Government which we have received for the past 2 years.

Our research effort is at a sensitive stage of development in that we are working to convince water utilities to place a voluntarily assessment on their water rates based upon volume of sales. We currently have pledges in excess of a half a million dollars with a goal of $1 million by the end of this year.

We believe that S. 904 could be compatible with the water utility industry's voluntary assessment effort. Money raised through such an assessment could be matched with funding authorized by S. 904.

Our concern is that S. 904 might provide an inducement for utilities to continue to rely on Federal research funding instead of implementing its own voluntary assessment.

Senator DURENBERGER. The point is not that there are certain kinds of research that the utilities will do with the right kind of financial base, but might not be done in other sectors; it was simply that you would like to see the water utility doing what gas and electric utilities are doing by way of making research contributions.

Mr. MILLER. We are concerned with providing for more research directed toward the operational problems of water utilities.

Dr. Mills noted in his testimony that $300 million is spent on water research. But it is directed toward a number of federally mandated priorities. It is very fragmented in this country. Funds for drinking water research came almost exclusively from EPA. But they are spent on regulatory and health research. They are not directed towards the research needs of water utilities.

Senator DURENBERGER. Mr. Smith, do you want to reply?

Mr. SMITH. Yes, sir. I certainly agree with Mr. Miller. We want to manage the research for that segment of the national water problem that relates to drinking water and the treatment of drinking water. There are many, many other problems, but the one that has been highlighted through EPA is treatment and water quality standards.

The water utilities are joining together and working very hard to fund the research foundation and to enhance its presence on the horizon of research. We would certainly like for this bill or any other bill to match these funds.

I happen to work for a utility that is a power gas and water utility. My fear is the other divisions contribute significantly to research and water contributes very little. We certainly would like to head in that direction.

Senator DURENBERGER. Gentlemen, thank you very much for your testimony. I appreciate it a lot and that of all the other wit

nesses.

[The prepared statements of Messrs. Smith and Miller follow:]