Water Supply Infrastructure Assistance Act of 1996

Water Supply Infrastructure Assistance Act of 1996 - Directs the Administrator of the Environmental Protection Agency to make grants to States for establishing water supply infrastructure accounts in State water pollution control revolving loan fund programs to provide assistance for: (1) the construction, rehabilitation, and improvement of water supply systems; and (2) source water quality protection programs to address pollutants in navigable waters for the purpose of making such waters usable by water supply systems.

(Sec. 6) Sets forth specific requirements for grant agreements, including that the State establishes to the Administrator's satisfaction that the State: (1) will deposit in the infrastructure account an amount equal to at least 20 percent of the total amount of all such State grants and will enter into binding commitments to provide assistance equal to 120 percent of the amount of each such grant payment; (2) will not make available any assistance from the infrastructure account without first determining that the applicant has adopted or will adopt a system of charges, policies, and procedures to ensure that recipients of financial assistance from the account are reasonably likely to repay the assistance and will have adequate resources to pay the cost of operation and maintenance of the water supply system; and (3) will take action to ensure that, after construction, rehabilitation, and improvement of a system undertaken with grant funds, such system will provide water supply services at the most economical cost.

(Sec. 7) Applies certain provisions of the Federal Water Pollution Control Act regarding authorized uses of water pollution control revolving funds, corrective action, and auditing, reporting and fiscal controls to infrastructure accounts. Makes exceptions with respect to the repayment period, the loan amortization date, and negative interest rates for disadvantaged communities. Permits the District of Columbia and U.S. territories to use their infrastructure accounts directly for construction, rehabilitation, and improvement of a water supply system.

(Sec. 8) Sets forth requirements regarding infrastructure accounts. Permits the use of assistance provided with funds made available under this Act for the acquisition of lands and other interests in lands from willing sellers.

(Sec. 9) Specifies percentages of funds to be allotted to States and U.S. territories for FY 1996 under this Act. Provides for allotments for FY 1997 through 2000 in accordance with the relative needs of the States. Reserves a specified amount for grants to Indian tribes and Alaska native villages.

(Sec. 10) Directs each State establishing an infrastructure account under this Act, after providing for public review and comment, to annually prepare a plan that identifies the intended uses of the amounts in the account, including a list of projects to be assisted and their priority, the criteria and methods established for fund distribution, and a description of the financial status of the water supply infrastructure account.

(Sec. 11) Requires the Administrator, in cooperation with the States and Indian tribes, to make and submit to the Congress: (1) a detailed estimate, biennially revised, of the cost of needed construction, rehabilitation, and improvement of water supply systems in the States and tribes; and (2) a comprehensive study of the economic impact on affected government units of the installation costs.

(Sec. 12) Expresses the sense of the Congress that a recipient of assistance under this Act should purchase American-made equipment and products.

(Sec. 13) Authorizes appropriations.

(Sec. 14) Authorizes the Administrator to: (1) make grants to States, local governments, and nonprofit organizations to provide technical assistance and training to owners and operators of small water supply systems; and (2) disseminate information to communities on planning, design, construction, and operation of water supply systems. Directs the Administrator to support the network of university-based Environmental Finance Centers in providing technical assistance to State and local officials. Authorizes appropriations.

(Sec. 15) Authorizes the Administrator to provide technical and financial assistance to States for: (1) the construction, rehabilitation, and improvement of water supply systems; and (2) source water quality protection programs to address pollutants in navigable waters for the purpose of making such waters usable by water supply systems, subject to specified limitations and conditions. Authorizes appropriations.

Authorizes the Administrator to provide technical and financial assistance in the form of grants: (1) for a source water quality protection program for the New York City Watershed in New York State; and (2) to the State of Alaska for the benefit of rural and Alaska Native villages for the development and construction of water systems. Authorizes appropriations. Permits the use of grant funds for the acquisition of lands. Limits the Federal share of the cost of grant activities to 50 percent.