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NACWA Legislative Update February 2007

Member Pipeline - Legislative - February 2007 Update

To: Members & Affiliates, Legislative Policy Committee,
Legal Affairs Committee, Clean Water Funding Task Force
From: National Office
Date: February 22, 2007

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This edition of the National Association of Clean Water Agencies’ (NACWA) Legislative Update, current through February 21, 2007, provides information on the activities of the 110th Congress of interest to the nation’s publicly owned treatment works (POTWs). For more detailed information regarding NACWA activities related to specific legislation, click on the web links in selected news items, or contact Susie Bruninga in NACWA’s Government Affairs Department at sbruninga@nacwa.org or 202/833-2672.

NACWA’s Bill Tracker (http://www.nacwa.org/private/legreg/legupdate/leg_tracker.cfm) provides a direct link to congressional websites where bill texts and summaries are posted. You can find NACWA letters, statements, alerts, updates and related documents under Legislative in the Member Pipeline section of the NACWA website (http://www.nacwa.org/private/leg_index.cfm).

$20 Billion Clean Water Infrastructure Funding Bill Heads to House Floor
Legislation strongly supported by NACWA that would authorize $20 billion over fiscal years 2008-2012 for the clean water state revolving loan fund (CWSRF) was introduced in January and favorably reported out of the House Transportation and Infrastructure (T&I) Committee Feb. 7 in a bipartisan 55-13 vote. The Water Quality Financing Act of 2007 (H.R. 720) (http://www.nacwa.org/private/legreg/legupdate/leg_tracker.cfm) was introduced just days after NACWA member, Kurt Soderberg, executive director of the Western Lake Superior Sanitary District in Duluth, Minn., testified on clean water funding needs at the first hearing of the House Water Resources and Environment Subcommittee in the new 110th Congress. In his January 19 testimony (http://www.nacwa.org/getfile.cfm?fn=2007-01-19soderbergtsty.pdf), Soderberg offered NACWA’s support for increased CWSRF funding but noted that viable funding sources, namely a clean water trust fund, would be necessary to help close the wastewater funding gap estimated at $400-$500 billion over the next twenty years. NACWA asked the subcommittee to include, and helped to draft, a key provision in the legislation that would require the Government Accountability Office (GAO) to report back to Congress by January 1, 2008 on “funding mechanisms and funding sources available to establish a Clean Water Trust Fund.”

Although Rep. James Oberstar (D-Minn.), chairman of the T&I committee, had planned to take the bill, which has 20 bipartisan cosponsors, to the House floor for a vote the week of Feb. 26, it now appears that the House will vote on the measure sometime in March. NACWA is using the extra time to activate members to contact their Representatives and urge them to support the bill (see the NACWA Special Edition Action Alert at http://www.nacwa.org/private/cwc/20070215aa.cfm). Members can go to NACWA’s homepage (www.nacwa.org) and click on the Write Congress Now icon to e-mail their Representatives to support H.R. 720. Talking points are available on this webpage to help members formulate their message. In addition, NACWA has issued numerous press releases along the way to generate publicity for the legislation (http://www.nacwa.org/advocacy/releases.cfm#nr). NACWA is also working via the Water Infrastructure Network (WIN) to have an ad placed in early March in Roll Call— Capitol Hill’s newspaper — urging Representatives to support the bill on the House floor.

While NACWA supports the bill and is working hard to get it passed, the Association recognizes that the bill represents only the first step toward securing additional funding for the nation’s clean water agencies. With that in mind, NACWA will continue to work with Congress to ensure the federal government moves in the direction of ensuring a sustainable revenue source to help municipalities meet the costly mandates of the Clean Water Act over the long-term.

Sewer Overflow Control Grants Bill to Obtain House Vote Next Month
The House T&I Committee also approved another important NACWA-backed bill on February 7 – the Water Quality Investment Act of 2007 (H.R. 569) (http://www.nacwa.org/private/legreg/legupdate/leg_tracker.cfm), which would authorize $1.8 billion in grants from fiscal year 2008-2012 to address sewer overflows. The bill has 19 cosponsors and is expected to accompany H.R. 720 to the House floor for a vote in March. Chairman Oberstar said that gaining passage of the bills early this congressional session will send a strong message to appropriators that federal funding for clean water infrastructure must be increased in EPA’s fiscal year 2008 budget (see related story). Again, while NACWA strongly supports this legislation, EPA estimates that combined and sanitary sewer overflow control projects will cost the Nation approximately $150 billion and $1.8 billion represents only a first step toward meeting these enormous needs. As with H.R. 720, members are encouraged to contact their Representatives in support of the bill and talking points are available for Association members to e-mail their Representatives on the Write Congress Now portion of the Association’s webpage (www.nacwa.org).

Bush Administration Signs FY 2007 Budget Bill, Seeks FY 2008 Cut to Clean Water SRF
A House-Senate joint continuing resolution to fund EPA and other federal agencies through the end of Fiscal Year (FY) 2007 was passed by Congress and signed into law by President Bush on Feb. 15. The joint resolution eliminates all earmarked grants in EPA’s budget and moves the funds into the CWSRF, thus providing the wastewater loan program with $1.08 billion for the current fiscal year. As such, several programs critical to the clean water community, including the National Biosolids Partnership (NBP) and the WATER ISAC, which are funded via federal earmarks, are at the discretion of the U.S. Environmental Protection Agency (EPA) for continued FY 2007 funding. Although NACWA has received confirmation that these programs will receive funds for FY 2007, the exact timing and process for funding these programs remains uncertain. EPA is preparing internal guidance on how to move forward with regard to such programs. NACWA will continue to work with the Agency to ensure this process is a smooth one and these programs are funded.

Meanwhile, the Bush Administration’s FY 2008 EPA budget request (http://www.epa.gov/ocfo/budget/index.htm) recommends approximately $688 million for the CWSRF — about the same amount it sought in FY 2007. The House and Senate authorizing and appropriations committees with jurisdiction over EPA programs and budgets have scheduled hearings at which EPA officials will defend the Agency’s budget request. Members of Congress already have expressed their dissatisfaction with the low CWSRF request and likely will ask EPA for further justification for the funding level at the upcoming hearings. NACWA will work with members of the House and Senate Appropriations Committees to increase the allocation for the CWSRF and also to secure another $1 million in the FY 2008 budget to support the continued operation of the National Biosolids Partnership program. NACWA has already sent letters to the leadership of the key Appropriations Committees in the House and Senate to ensure FY 2008 funding for the NBP and will be sending additional to additional key members in the House and Senate early next week.

NACWA expressed its disappointment via press releases at the Bush Administration’s FY 2008 budget request for the CWSRF, which is half the historic funding level of $1.35 billion last seen in FY 2004. Similarly, many members of Congress are expressing their disappointment with the proposed budget in hearings on Capitol Hill. On February 14, Benjamin Grumbles, EPA’s Assistant Administrator for Water, testified before the House Transportation and Infrastructure Committee, reiterating once again the Agency's commitment to sustainable infrastructure, including the Administration's initiative on private activity bonds. Grumbles emphasized the agency's position that localities should utilize private investment and not rely on federal funds to narrow the water infrastructure spending gap that EPA has identified as between $400 and $500 billion over the next twenty years.

To respond to the notion that private, market-based investment alone can overcome the funding gap, NACWA is using the Targeted Action Fund’s Rapid Response Fund to develop a quick but thorough and economically sound response to this position. This response will also inform NACWA’s advocacy position going forward and will provide a strong document that can counter the Agency’s oft-repeated position that financing mechanisms, including private activity bonds and public-private partnerships, are the solution to the funding gap.

Bush Administration FY 2008 Budget Request Would Likely Trigger Permit Fee Incentive Proposal
The Administration’s FY 2008 budget request would also include $221 million for Clean Water Act Section 106. This is important because EPA proposed a rule in January that would shift funding for the National Pollutant Discharge Elimination System (NPDES) permitting program via incentives to an almost entirely fee-based approach. The fee-based program, however, would only be triggered if the FY 2008 Section 106 funding level is higher than the FY 2006 enacted level, which would be the case under the Administration’s proposed budget.

EPA’s NPDES permit fee incentive proposal has aroused significant opposition from numerous stakeholder groups, especially state groups such as the Association of State and Interstate Water Pollution Control Administrators (ASIWPCA) and the Environmental Council of States (ECOS). NACWA members have also been somewhat skeptical of the proposal, expressing concern that the Agency’s ultimate goal may be to replace federal funding with increased municipal permitting fees. To ensure that the clean water agencies have their voices heard, the Association is working as part of a broad-based coalition that is meeting regularly with EPA, congressional and Office of Management & Budget (OMB) staff to address the issue. NACWA will be providing comments to EPA on the proposal and Regulatory Alert 07-01 contains more information on this effort (http://www.nacwa.org/private/regalerts/ra07-01.cfm). Comments are due to EPA by March 5. The Association also met this week with key U.S. Senate staff from both sides of the aisle who have expressed concern with EPA’s proposal and are considering a rider to the FY 2008 budget package that would prevent EPA from implementing the rule. The Association will provide members with updates as developments on the permit fee issue unfold.

NACWA Closely Follows Congressional Climate Change Initiatives
NACWA’s legislative horizons are expanding as the Association begins to track more closely activities in the House and Senate relating to climate change. While the issue has been percolating at the state and local level for a number of years, the new Democratic leadership has vowed to make climate change a priority at the national level as well. What that means for the nation’s clean water agencies is uncertain, although the issue may resonate on several different levels. On one level, utilities must prepare for how changes in climate, whether that means more frequent and severe storms or extended periods of drought, can affect their operations. On another level, utilities may face increased scrutiny from state and federal regulators regarding their emissions of so-called greenhouse gases, such as methane. NACWA will be sending a brief survey out to members this week seeking information on how clean water agencies are being impacted by climate change and what, if any, actions they are taking to deal with climate change concerns. One thing is certain, however, state and national efforts are underway to control emissions and clean water agencies must be prepared to deal with these initiatives. For example, California recently passed AB 32, the Global Warming Solutions Act of 2006, which made California the first state to establish statewide limits on greenhouse gas emissions. This legislation is being looked at by other states as a model and NACWA wants to ensure that clean water agencies are prepared for how they may be impacted by new requirements.

The Senate Environment and Public Works Committee, chaired by Sen. Barbara Boxer (D-Calif.), has been restructured in the 110th Congress to allow for a greater focus on climate change issues. The Private Sector and Consumer Solutions to Global Warming and Wildlife Protection Subcommittee, chaired by Sen. Joe Lieberman (I-Conn.), and the Public Sector Solutions to Global Warming, Oversight, and Children’s Health Protection Subcommittee, chaired by Sen. Boxer, are offshoots of the Clean Air, Climate Change, and Nuclear Safety Subcommittee from the previous Congress and will address climate change. Several bills have been introduced in both Houses of Congress that mostly deal with setting up cap-and-trade systems for reducing emissions of carbon dioxide and other gases that would have little effect on the nation’s clean water utilities, but more far-reaching legislative efforts are anticipated.

In line with this heightened national focus on climate change, NACWA has renamed its Air Quality Committee, the Air Quality and Climate Change Committee to ensure the technical issues that will ensue from the climate change debate receive the attention they deserve. NACWA’s Legislative Committee will also be actively following climate change legislation closely as NACWA ramps up its advocacy in this arena.