	Introduction

In 1987, Congress amended the Clean Water Act (CWA) to provide for establishment of a program of state revolving loan funds (SRFs) through which to finance local water pollution abatement projects ( P.L. Although no additional authorizing legislation was adopted after 1987, Clean Water Act appropriations, contrary to stated expectations , continued. In 1995, EPA ruled that Davis-Bacon no longer applied to CWA/SRF projects. In the spring of 2000, EPA reversed itself and, entering into a settlement agreement with the Building and Construction Trades Department, AFL-CIO, affirmed that the act would be applied to such projects effective July 1, 2001. Other amendments followed. 87-88.) Through the next few years, Congress variously modified the Federal Water Pollution Control Act (FWPCA). It was clear that the SRFs would serve federally specified purposes and in a federally specified manner. The end. The relevant part of the new Section 513 was to have read:
The Administrator shall take such action as may be necessary to ensure that each laborer or mechanic employed by a contractor or subcontractor of a project that is financed in whole or in part by a grant, loan, loan guarantee, refinancing, or any other form of financial assistance provided under this Act ( including assistance provided by a State from a water pollution revolving loan fund established by a State pursuant to Title VI) shall be paid wages at rates that are not less than the prevailing rates for projects of a similar character in the locality of the project that is financed under this Act, as determined by the Secretary of Labor in accordance with the Act of March 3, 1931 (commonly known as the "Davis-Bacon Act") (40 U.S.C. Congress continued to appropriate funds for CWA projects and for SRFs. 961 would have deleted the phrase "before fiscal year 1995" and would have removed "administrative requirements previously imposed on Title II grant recipients and currently extended to applicants who receive SRF capitalization grant loans." Davis-Bacon is not self-enforcing. Did DBA provisions continue to be written into CWA/SRF contracts? Finally, EPA's Federal Register explanation noted: "... as a matter of policy , the Agency has determined that prevailing wage rate requirements applicable to federally-assisted construction projects should continue to apply to federally-assisted treatment works construction in the CWSRF program." The BCTD stated its understanding that "EPA would prospectively apply Davis-Bacon prevailing wage requirements to construction of treatment works projects assisted by State Water Pollution Control Revolving Funds with funds made directly available by capitalization grants under Title VI of the Clean Water Act...." The BCTD explained: "... in order to receive a capitalization grant" for its SRF, the states had been required to "enter into a capitalization grant agreement with the EPA that imposes an assortment of conditions"—one of which was the Section 602(b)(6) DBA requirement. But, EPA subsequently moved the effective date back to September 1, 2001. What happened after 1994 when SRF authorizations expired remains in question. But absent further authorizations, Congress continued to fund the SRF program through the appropriations process. The act itself requires an agreement to pay not less than the locally prevailing wage rate be included in every construction contract "in excess of $2,000, to which the United States or the District of Columbia is a party ...." (Italics added.) If the EPA were correct (in either stance), upon what legal foundation does its judgment rest? If so, on what ground? Report from the Subcommittee: H.Rept. "By establishing the Davis-Bacon prevailing wage requirement for the construction of treatment works, the Committee continues its long-standing practice of ensuring the application of Davis-Bacon where Federal funds are provided for construction...." It added: "For the Clean Water SRFs, the most significant source of revenue in the state revolving funds is the Federal capitalization grant.
The Davis-Bacon Act (DBA) requires, among other things, that not less than the locally prevailing wage be paid to workers employed, under contract, on federal construction work "to which the United States or the District of Columbia is a party." Congress has added DBA prevailing wage provisions to more than 50 separate program statutes.
In 1961, a DBA prevailing wage requirement was added to the Federal Water Pollution Control Act (P.L. 87-88), now known as the Clean Water Act (CWA), which assists in construction of municipal wastewater treatment works. In 1987, Congress moved from a program of federal grants for municipal pollution abatement facilities to a state revolving loan fund (SRF) arrangement in which states would be expected to contribute an amount equal to at least 20% of SRF capitalization funding. The SRFs were expected to remain as a continuing and stable source of funds for construction of treatment facilities. And, Congress specified that certain administrative and policy requirements (including Davis-Bacon) were to be annexed from the core statute and would apply to treatment works "constructed in whole or in part before fiscal year 1995" with SRF assistance. By October 1994, under the 1987 amendments, it was expected that federal appropriations for SRFs would end.
After 1987, Congress variously reconsidered the CWA and the SRF program but made no further authorizations. It did, however, contrary to expectation when the 1987 legislation was adopted, continue to appropriate funds for SRF pollution abatement projects. Thus, a conflict arose. Did the administrative and policy requirements associated with federal funding (inter alia, the prevailing wage requirement) continue to apply? If so (or if not), upon what legal foundation? In 1995, the Environmental Protection Agency (EPA) ruled that prevailing wage rates (Davis-Bacon) would no longer be required on SRF projects. The Building and Construction Trades Department (BCTD), AFL-CIO, protested.
What happened after 1994 is not entirely clear: that is, whether prevailing rates were actually paid. In the spring of 2000, EPA reversed its position and came to conclude that Davis-Bacon did indeed apply. Following notice in the Federal Register (and review of submissions from interested parties), EPA entered into a "settlement agreement" with the BCTD. It would enforce DBA rates on CWA projects effective July 1, 2001. But then EPA moved the effective date back, to late summer—and, then, to October. Thereafter, it seems, EPA was silent.
During recent years, Congress has increasingly considered funding mechanisms other than direct appropriations for public construction: e.g., joint federal and state revolving funds, loan guarantees, tax credits, etc. This report is a case study of the application of DBA requirements to one such mechanism, the CWA/SRFs. The question of DBA application to the SRFs continues in the 110th Congress.