transportation systems contribute to meeting air quality health standards in regions where these standards are not now being met. In an effort to solidify further the Federal/State partnership in improving the Nation's environment, the administration supports the 49% increase in budget authority for grants to support States and localities in operating their environmental programs enacted for 1978, and recommends an additional 3% increase in 1979. In addition, a proposal to consolidate grants for air, water quality, drinking water, and solid waste programs will be submitted separately. This initiative will provide States and local governments with increased flexibility to respond to local pollution problems and to initiate and develop abatement and control strategies. This budget also proposes a major emphasis on the control of toxic substances. Personnel increases of 82% and budget authority increases of 96% over 1978 are recommended. The increases reflect the priority placed on the effective control of toxic substances as an important part of the Environmental Protection Agency's preventive health mission. The administration continues to seek passage of its comprehensive oil pollution liability and compensation legislation to assure adequate and timely compensation for damages and cleanup costs resulting from oil spill pollution. Budget resources in support of the mission of pollution control and abatement are included in agencies other than the Environmental Protection Agency, and, where their primary purpose is the support of other national needs, are classified in other functional categories. For example, the Environmental Protection Agency has identified over 140 major violations of pollution standards by Federal facilities and has notified the agencies affected that they must comply with pollution standards. In response, the administration has ensured that each agency’s proposed budget includes sufficient funding for pollution control projects to halt these violations in line with compliance schedules approved by the Environmental Protection Agency. Several agencies also are proposing funding a number of projects for facilities that will reduce pollution to avoid future violations. The following table summarizes the financing of pollution control and abatement activities that are classified as meeting these as well as other national needs. For further details see Special Analysis O, “Environment.” Tax expenditures for pollution control result from the exclusion of interest on pollution control bonds from income subject to tax. The facilities financed by these bonds are privately owned, even though t •e nominally issued by State or local governments. Under C he resulting tax expenditure would be $385 millior x reform proposals would eliminate the tax-ext vides grants to State and local agencies for 75% of the costs of planning, designing, and constructing municipal wastewater treatment facilities. With over 11,295 projects currently underway, nearly all of the $18 billion authorized under the act has been obligated. The administration is committed to an additional $45 billion over the next 10 years to assure that the construction of wastewater treatment facilities meets our national water quality goals. The Environmental Protection Agency intends to spend over $19 million in 1979 to reimburse the Corps of Engineers for the supervision of construction activities on wastewater treatment facility projects. This will result in more efficient management of the construction grants program. The Corps' experience in the area of public works construction will increase safeguards against fraud and other improprieties in the use of nearly $5 billion in Federal funds annually. Regulatory and research programs.-Consistent with its firm commitment to eliminate public health hazards, the administration proposes a substantial increase in both funds and personnel to ensure that the quality of the Nation's drinking water is adequately protected by the States and localities. A 29% increase in budget authority over the 1978 level is requested for the drinking water program. Included in the proposal is an increase of 36% in grant assistance. A sixfold increase in personnel for the enforcement program is recommended to begin expanded efforts to correct violations of standards. The administration will also propose amendments to the Safe Drinking Water Act to define more precisely the respective responsibilities among the Federal Government, the States, and localities in protecting local drinking water supplies. The legislation will reemphasize the intent of the act that the States must have the primary responsibility for assuring that the standards are enforced. The administration proposes increases in budget authority of $56 million and 165 positions for the air quality program in 1979. In addition, a thorough review of the air quality program has resulted in a substantial redirection of resources to high-priority activities identified by the recently enacted Clean Air Act Amendments.These changes will result in increased emphasis on grants to States, setting of standards for new stationary sources of pollution, better enforcement of existing air quality standards, and expanded programs to study ambient air problems of photochemical oxidants and toxic fine particulates. The new positions will be devoted primarily to enforcement actions. The administration intends to integrate the Department of Transportation's transportation planning process with the Environmental Protection Agency's air quality planning requirements to ensure that transportation systems contribute to meeting air quality health standards in regions where these standards are not now being met. In an effort to solidify further the Federal/State partnership in improving the Nation's environment, the administration supports the 49% increase in budget authority for grants to support States and localities in operating their environmental programs enacted for 1978, and recommends an additional 3% increase in 1979. In addition, a proposal to consolidate grants for air, water quality, drinking water, and solid waste programs will be submitted separately. This initiative will provide States and local governments with increased flexibility to respond to local pollution problems and to initiate and develop abatement and control strategies. This budget also proposes a major emphasis on the control of toxic substances. Personnel increases of 82% and budget authority increases of 96% over 1978 are recommended. The increases reflect the priority placed on the effective control of toxic substances as an important part of the Environmental Protection Agency's preventive health mission. The administration continues to seek passage of its comprehensive oil pollution liability and compensation legislation to assure adequate and timely compensation for damages and cleanup costs resulting from oil spill pollution. Budget resources in support of the mission of pollution control and abatement are included in agencies other than the Environmental Protection Agency, and, where their primary purpose is the support of other national needs, are classified in other functional categories. For example, the Environmental Protection Agency has identified over 140 major violations of pollution standards by Federal facilities and has notified the agencies affected that they must comply with pollution standards. In response, the administration has ensured that each agency's proposed budget includes sufficient funding for pollution control projects to halt these violations in line with compliance schedules approved by the Environmental Protection Agency. Several agencies also are proposing funding a number of projects for facilities that will reduce pollution to avoid future violations. The following table summarizes the financing of pollution control and abatement activities that are classified as meeting these as well as other national needs. For further details see Special Analysis O, “Environment.” Tax expenditures for pollution control result from the exclusion of interest on pollution control bonds from income subject to tax. The facilities financed by these bonds are privately owned, even though the bonds are nominally issued by State or local governments. Under current law the resulting tax expenditure would be $385 million in 1979. The tax reform proposals would eliminate the tax-exempt POLLUTION CONTROL AND ABATEMENT—INCLUDING PROGRAMS ASSIGNED TO OTHER MISSIONS [In millions of dollars) Outlays Obligations # actual 1977 1978 1979 actual estimate estimate Environmental Protection Agency (largely subfunction 304): Water: Construction grants or loans------------------- 3,530 7,501 4,000 5,000 Other water---------------------------------- 307 256 386 372 Air------------------------------------------- 177 165 190 224 Other'---------------------------------------- 352 386 488 463 Subtotal----------------------------------- 4,366 8,308 5,064 6,059 Other programs: Water: Construction grants or loans------------------- 178 442 117 152 Other--------------------------------------- 500 534 587 654 Air------------------------------------------- 303 345 333 324 Land------------------------------------------ 136 114 135 133 Other'---------------------------------------- 346 471 416 511 Subtotal---------------------------------- 1,463 1,906 1,588 1,774 Total------------------------------------ 5,829 10,214 6,652 7,833 1 Includes toxic substances control, waste management, noise, radiation, and pesticides. status of newly issued bonds because tax exemption is an inefficient subsidy. The tax code would be amended, however, to permit the full 10% investment tax credit to be claimed for such facilities in cases where the facilities are amortized over 5 years. Water resources.—The mission of water resources development is to manage and control our water resources in order to attain the benefits of water resource projects while preserving the quality of the environment. The Federal Government carries out its responsibilities with a careful regard for the role of State and local governments. The Federal Government is involved in a wide range of activities in support of this mission: • flood control; • irrigation and water conservation; development and maintenance of inland waterways and harbors; hydroelectric power development; municipal and industrial water supply development; • recreation and wildlife preservation; and • erosion control. Outlays for this mission are estimated to decrease from $3.7 billion in 1978 to $3.4 billion in 1979. The involvement of the Federal Government in water resources development has grown in piecemeal fashion over the years without a unified and consistent policy. A major policy study is now underway in an effort to evaluate the state of our water resources and to develop policies and programs consistent with that evaluation. The administration wants to improve the efficiency, consistency, and contribution to environmental quality and to water conservation of Federal water programs. Presidential recommendations on water resources policy are expected to be transmitted to the Congress early in the calendar year 1978. Although no new water resource construction projects are proposed in this budget, the administration may recommend some new project starts in conjunction with the water resources policy recommendations. In addition, other program and project recommendations in this budget may be amended at that time. The 1979 budget includes outlays of $16 million for the Corps of Engineers to continue a non-Federal dam safety inspection program initiated by the President in 1978. Under this program, the Federal Government will finance the one-time inspection of approximately 9,000 high-hazard dams and assist the States in training personnel to establish adequate State dam safety programs to continue this activity in the future. The recommended outlay levels in the 1979 budget for projects now being constructed by the Corps of Engineers and Bureau of Reclamation are expected to result in slightly reduced work levels and completion delays for some projects as compared to the schedules in the 1978 budget. High-priority projects, such as hydroelectric power, urban flood damage reduction, and municipal and industrial water supply, will be kept on schedule. Delays are anticipated in the construction of the Auburn Dam in California, pending a current review of geologic conditions, and the Garrison diversion project in North Dakota, pending a resolution of legal and international questions. Should these problems be resolved satisfactorily, any additional funds that may be required will be requested. Estimated 1979 outlays for the planning of future water projects in the Corps and Bureau of Reclamation are slightly below 1978. Two kinds of Corps of Engineers studies are proposed for termination: those for which it is unlikely that a worthwhile project will ever result, and those whose primary purpose is not a high-priority Federal water resources mission. The following table shows construction projects that have been funded with year-to-year appropriations and that need future budget |