A bill to direct the Administrator of the Environmental Protection Agency to establish a demonstration program for installation of sewer and water supply facilities for certain colonias in the State of Texas and to establish a revolving loan fund to enable residents of such colonias to connect their residences to such facilities, and for other purposes.

Directs the Administrator of the Environmental Protection Agency to make grants to specified Texas counties covering all the costs of constructing sewage and water supply facilities for certain colonias. Authorizes appropriations for FY 1988 and 1989.

Requires the Administrator to make a grant to each of such counties for the establishment of revolving loan funds that enable residents of such colonias to install plumbing in their homes and have their homes connected to sewer facilities and drinking water supplies. Authorizes appropriations for FY 1989 and beyond. Requires the Administrator to prepare and transmit periodic reports on this Act's programs.