A bill to authorize the Administrator of the Environmental Protection Agency to make grants for providing alternative water supplies to replace contaminated groundwater, and for other purposes.

Authorizes the Administrator of the Environmental Protection Agency to make grants to provide alternate water supplies to replace contaminated groundwater. Makes owners or operators of a public water system or units of local government eligible for such assistance. Limits the Federal share of costs to 50 percent and also limits the maximum amount of any one grant and total grants within a State.

Directs the Administrator to report annually to the Congress on such grant program, including information on the sources and extent of groundwater contamination and the number of people affected. Authorizes appropriations for FY 1986 through 1988.