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American Water Works Association Journal
Copyright 2005 American Water Works Association

April 1, 2005
Volume 97; Issue 4

Water news roundup

DRAFT INFRASTRUCTURE BILL BOOSTS INFRASTRUCTURE FUNDING

A $50 billion federal trust fund that combines current Clean Water and Drinking Water State Revolving Fund (SRF) resources with $40 billion to be raised over five years by a fee on bottled beverages would be established under draft legislation spearheaded by the Association of Metropolitan Sewerage Agencies (AMSA).



Aimed to narrow the looming water and wastewater infrastructure financing gap, the early 2005 draft of what AMSA has termed "an evolving project" would authorize $10 billion annually from 2006 through 2010 for a Water Assistance Trust and Environmental Restoration (WATER) fund.



The draft assumes Congress will continue to appropriate $2 billion annually for the two SRFs over the next five years, which would be combined with $8 billion to be generated by a 6.6 percent fee on the price of beverages (including soft drinks, bottled waters, and alcohol but excluding milk, medicinal products, infant formula, and 100% fruit juices). Also in the mix are "additional and alternative" revenue sources that are still being considered, including a clean and safe water "restoration fee" on a broad range of unspecified activities.



The fund would allocate



* $5 billion a year for clean water matching grants and loans (75% of which must go for grants),



* $4 billion annually for drinking water matching grants and loans (again, 75% of which is for grants),



* $300 million for grants to support various technology research and development programs (including to establish a utility management research center and provide technical assistance to small and rural systems),



* $250 million for programs to improve fishery ecosystems,



* $200 million for improving control of nonpoint sources of water pollution, and



* $250 million for programs to improve specified regional waterways such as the Great Lakes and the Chesapeake Bay.



The draft legislation, which is expected to undergo additional revisions, would establish the trust fund as an "off-budget" account not subject to administration or congressional appropriations actions and exempt from general budget limits imposed by statute. AWWA especially urged this so-called "firewall" provision to ensure that all revenues are allocated annually.



The draft would also ban use of funds to subsidize growth while expanding project eligibility to include enhancing security, replacing aging infrastructure and lead service lines, extending sewer service to areas with failed septic systems, improving water quality monitoring, consolidating drinking water systems, implementing water conservation projects, and providing for alternative supplies, including through desalination.



It would also increase funding for state administration of the funded programs, require that all engineering and architecture contracts be awarded in compliance with Brooks Act procurement processes, and authorize states to provide additional forms of financial assistance, including extended loan repayment periods and principal subsidization.