NACWA June 2005 Legislative Update

This edition of the National Association of Clean Water Agencies’ Legislative Update, current through June 30, 2005, provides information on the activities of the 109th 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 at the end of selected news items, or contact NACWA’s Lee Garrigan at 202/833-4655 or lgarrigan@nacwa.org.

NACWA members can track congressional action on individual bills through NACWA’s Bill Tracker. The Tracker provides a direct link from NACWA’s website to congressional websites where bill texts and summaries are posted, allowing members to research relevant federal legislation. The site also includes the status and most recent action taken on all federal legislation through a link to the Library of Congress’ “Thomas” website. To renew or bookmark the Bill Tracker, go to http://www.nacwa.org/private/legreg/legupdate/leg_tracker.cfm.

Clean Water Funding

House Holds First Hearings on NACWA Trust Fund Concept
The debate over the future of long-term federal financial contributions to the country’s aging wastewater infrastructure systems and NACWA’s trust concept moved to center stage in June with a two-part hearing in the U.S. House Subcommittee on Water Resources and Environment. Chairman John J. Duncan, Jr. (R-TN) said he convened the two days of hearings to examine differing approaches to financing water infrastructure projects. The June 8 hearing explored the NACWA-supported establishment of a clean water trust fund similar to the highway and aviation trust funds. The majority of Representatives at the hearing indicated they were willing to engage in a serious discussion on the creation of a federal trust fund to finance future clean water projects. NACWA’s work on the trust fund effort has been the focal point of a campaign led by the Association’s Clean Water Funding Task Force. The second hearing on June 14 examined other means of funding clean water projects.

The hearing’s lead witness, Dr. Frank Luntz, presented the results of the 2005 poll and survey performed on behalf of NACWA’s Clean Water Funding Task Force that found overwhelming public support for a clean water trust fund. “Clean water is seen as a higher priority and a more important principle than the investments made in the more high profile areas of transportation and airways,” Luntz said. When asked for his assessment of the findings, Luntz remarked, “I have been a professional pollster for almost 20 years and I can tell you from personal experience that such an overwhelming consensus about the role of Washington doesn’t happen often – but it exists here.”

Dr. Kenneth Rubin, Managing Partner of PA Consulting Group, testifying on behalf of NACWA, presented the findings of his economic review of specific revenue sources that were examined as potential options to finance a clean water fund. An evaluation of fees or taxes on water-based recreational products and services, industrial dischargers, agricultural chemicals, and beverages proved that these individual options were not uniformly strong against all of the criteria. A combination of a small unit tax rate on flushable products and a broad clean water restoration fee was found to be a more favorable option. All of the witnesses, and many of the Members at the hearing, indicated they could support a fair and equitable revenue source that would be broad-based and could demonstrate achievable clean water benefits. Additionally, a water user fee, which would involve placing a Federal surcharge on water and/or wastewater rates, had no support from any of the groups providing testimony.

Also making a strong case for the establishment of a new trust fund was Jack Schenendorf on behalf of the Associated General Contractors of America (AGC), a prominent member of the Water Infrastructure Network (WIN). Mr. Schenendorf, a former Chief of Staff to the House Committee on Transportation and Infrastructure (T&I), provided an overview for Subcommittee members of the difficult, but surmountable, issues that both Congress and the highway lobby faced in getting support for the successful creation of the Highway Trust Fund. “Financing water infrastructure through a trust fund would have several advantages over general fund financing,” Schenendorf said. He said it would be deficit neutral, would provide the certainty that State and local officials need to commit to long-term infrastructure financing and would “get the job done.”

The final two witnesses on the hearing panel were from the American Water Works Association (AWWA) and the American Beverage Association (ABA). The AWWA witness supported a significant increase in federal support for water and wastewater infrastructure specifically for communities struggling to meet the financial challenges associated with combined and sanitary sewer overflows, population declines, security enhancements and economic hardships. AWWA recommended that drinking water utilities strive to be fully self-sustaining through rates and reiterated its opposition to any water user fees. The ABA opposed a tax aimed only at the beverage industry and urged Congress to look at a fair, broad-based, comprehensive mechanism to address clean water funding needs.

The second hearing on June 14 focused on other possible mechanisms to encourage additional financing of water infrastructure projects. The State of Maryland’s witness presented an overview of the Chesapeake Bay Restoration Fund, supported by a $2.50 a month fee on sewer bills and an equivalent $30 annual fee on septic system owners. A witness from Lehman Brothers advocated for the removal of the “unified volume cap” on tax-exempt private activity bonds, which restricts the amount of bonds that states and localities may issue in any given year. The Coalition for Alternative Wastewater Treatment argued for more innovative ways of integrating decentralized, distributed, and nonstructural water infrastructure to close the funding gap. Testimony from the director of the Great Lakes Rural Community Assistance Program expressed support for a new clean water trust fund.

NACWA will show highlights of the June 8 hearing the upcoming 2005 Summer Conference in Hilton Head, SC. The Association will continue to work with congressional members and staff to gain support for NACWA’s clean water trust fund proposal.

Senate Committee Set to Introduce Water Infrastructure Bill
Negotiations are ongoing between the majority and minority staff of the Senate Environment and Public Works (EPW) Committee to craft a clean and safe water infrastructure funding bill that will have the support of the chairs and ranking members of the full EPW Committee and the Fisheries, Wildlife and Water Subcommittee. Committee staff indicate that a bill could be introduced prior to the month-long August recess if Congress finishes work on the long-stalled reauthorization of the Transportation Equity Act. NACWA continues to urge EPW to seriously consider using legislative language from NACWA’s draft Clean Water Trust Act of 2005 in the committee bill. Fisheries Subcommittee Chair Lincoln Chafee (R-RI) will be the lead sponsor of the bill, which, according to the bill drafters, will be ‘very similar’ to last year’s measure, S.2550, the Water Infrastructure Financing Act. S. 2550 was introduced and passed by the EPW Committee in June 2004 but was not brought to the Senate floor for a vote. It would have reauthorized the state revolving loan fund programs for five years, providing $20 billion for wastewater and $15 billion for drinking water, giving priority to systems that engage in asset management. The bill also included a provision to reauthorize the sewer overflow control grant program through fiscal year 2009 at $250 million per year.
NACWA member utilities reviewed last year’s bill and found that it did not adequately address the construction funding needs of POTWs and, consequently, NACWA did not endorse S. 2550. Congressional support for appropriations to adequately fund the state revolving loan funds in the Environmental Protection Agency’s budget continues to erode, making it unclear where the EPW Committee will obtain the tens of billions of dollars to fund their bill. NACWA will continue to work with EPW staff to encourage the Committee to revise and expand their approach to closing the wastewater infrastructure funding gap.

In a related development, Sen. George Voinovich (R-OH) has recruited Sen. Ted Stevens (R-AK), a senior member of the Senate Committee on Appropriations as a sponsor of S. 1314, a bill “to amend the Federal Water Pollution Control Act to authorize appropriations for states water pollution control revolving funds, and for other purposes.” When published, the text of the bill is expected to be similar to legislation advanced by Sen. Voinovich in the past. In the 108th Congress, he sponsored S. 170, the Clean Water Infrastructure Financing Act of 2003, which directed the EPA Administrator to assist States in establishing simplified procedures for small water systems to obtain assistance under the Act, required that the revolving funds be used only for providing assistance for activities that have as a principal benefit the improvement or protection of water quality of navigable waters, provided for an extended repayment period and additional subsidization with respect to loans made to financially distressed communities from revolving funds, and authorized $3 billion a year for the clean water SRF. Staff indicates that this year’s bill will be very similar and may increase the authorization to $4 billion per year. Upon publication, the bill will be available through NACWA’s Bill Tracker (http://www.nacwa.org/private/legreg/legupdate/leg_tracker.cfm). S.170 did not receive a hearing in the last Congress. NACWA will continue to work with Sen. Voinovich, a long-time champion of clean water, to recruit his support for trust fund legislation.

Clean Water SRF Bill Gains Support in House
Reps. Sue Kelly (R-NY) and Ellen O. Tauscher (D-CA) introduced legislation May 26 to amend the Federal Water Pollution Control Act to authorize appropriations for State water pollution control revolving funds. The Clean Water Infrastructure Financing Act of 2005 (H.R. 2684) authorizes $25 billion for the clean water state revolving fund (SRF) over five years, $10 million a year for technical and financial assistance to owners and operators of POTWs for the development of asset management inventories and plans, management assistance to small systems, and grants to financially distressed communities in years when the Congress appropriates more than $1.4 billion for the CWSRF. NACWA will continue to work with the congresswomen to expand the bill to include the establishment of a trust fund to finance both the CWSRF and grants to municipal clean water agencies.

Extension of NACWA-Supported Wet Weather Grants Law Awaits House Floor Action
The House Transportation and Infrastructure (T&I) Committee on May 19 unanimously approved H.R. 624, introduced for a second consecutive year by Rep. Dave Camp and 30 co-sponsors. The NACWA-supported bill would amend the Clean Water Act to authorize appropriations for grants to municipalities and States to control combined sewer overflows (CSOs) and sanitary sewer overflows (SSOs). EPA estimates it will cost communities $50.6 billion to address CSOs and $88.5 billion to address SSOs. H.R. 624 authorizes $250 million for each of fiscal years 2006 through 2011, totaling $1.5 billion over six years. H.R. 624 also would make other changes to ensure that States may administer the grants in the same way that they administer loans from their state revolving loan funds. Rep. Camp received NACWA’s National Environmental Achievement Award May 3 at the Capitol Hill Reception during NACWA’s 2005 National Clean Water Policy Forum.

NACWA 2003 – 2004 Past President Paul Pinault, Executive Director of the Narragansett Bay Commission in Providence, Rhode Island, testified on behalf of NACWA at a July 2004 hearing before the House Water Resources and Environment Subcommittee on a similar bill (http://www.nacwa.org/advocacy/testimony/2004-07-08pptestimony.cfm). The original two-year sewer overflow grant program was signed into law in 2001 and provided authorization for appropriations for grants from EPA to municipalities but was never funded. In order for the bill to pass the U.S. House of Representatives, T&I Committee Chairman Don Young (R-AK) must make a request to the leadership to schedule a vote on the bill on the House floor. NACWA will continue to urge Congress to pass and fully fund the legislation.

NACWA Urges Support for Stormwater Mitigation Program
NACWA has asked its members to contact key Representatives to urge them to support the Highway Stormwater Discharge Mitigation Program (Section 1620) currently included as a new provision in the Transportation Equity Act (S. 732) as passed in May by the United State Senate. he new stormwater program is included in the Senate version of the bill and would authorize $907 million over five years using 2 percent of the Surface Transportation Program funds for projects such as stormwater retrofits, the recharge of groundwater, natural filters, stream restoration, and minimization of stream bank erosion. House Members have been asked to sign a Dear Colleague letter (http://www.nacwa.org/advocacy/co/2005-06-20demsdcdraft.pdf) in support of the new Senate program. As of June 30, over 60 Representatives had signed the letter. NACWA also has joined together with the nation’s mayors, cities, states, environmental groups and water community in support of the Highway Stormwater Discharge Mitigation Program in a final conferenced transportation bill (http://www.nacwa.org/advocacy/co/2005-06hpack.pdf).

The transportation conferees have been meeting to settle on a final overall spending level for a multi-year authorization bill for renewing the 1998 TEA-21 bill. The authorization for the law expired in 2003 and recent negotiations have been bogged down over a spending level that will be acceptable to both Congress and the White House. Senator Kit Bond (R-MO), Chairman of the Senate Environment and Public Works Subcommittee on Transportation and Infrastructure, with support from state departments of transportation, will try to remove the stormwater provision from the bill as the conference goes forward over the coming weeks. NACWA and other stakeholder groups are continuing their effort to get the needed support for the measure from key House conferees.

Budget and Appropriations

Senate Passes EPA Budget
The U.S. Senate passed by a vote of 94-0 on June 30 the fiscal year (FY) 2006 Interior Appropriations bill, including $1.1 billion for the clean water state revolving loan fund (CWSRF) in the U.S. Environmental Protection Agency’s (EPA) budget, setting the stage for a conference committee between the House and Senate to resolve differences over program funding levels. The Senate Committee on Appropriations on June 9 recommended the $1.1 billion level after the House on May 19 approved only $850 million for the CWSRF. The Administration had sought only $730 million for the program in its proposed FY 2006 budget for EPA. On June 28, the White House Office of Management and Budget sent Senators a Statement of Administration Policy that urged the Senate to reduce the funding level for the clean water SRF, back down to $730 million, and to redirect those funds to EPA’s Water Sentinel program, the Brownfields program, and other Administration-supported initiatives. NACWA and a broad group of stakeholder organizations signed a joint letter to the Senate Appropriations Committee leadership June 8 (http://www.nacwa.org/advocacy/co/2005-06-08sensrf.pdf) that requested the Committee to support at least $1.35 billion for the clean water SRF.

Beginning with the Bush Administration’s FY 2006 budget request for EPA, the Senate bill decreases homeland security funding in three accounts by $2 million but provides $2 million for the Water Information Sharing and Analysis Center (Water ISAC) and directs that the Association of Metropolitan Water Agencies (AMWA) continue to administer the project. In the State and Tribal Assistance Grants (STAG) account, the bill provides $1.1 billion for the clean water SRF and $850 million for the drinking water SRF. Nonpoint Source Section 319 grants were decreased by nearly $1.8 million. The Senate bill also restores $1.2 million for Wastewater Operator Training grants and includes $200 million for 146 targeted project grants. As has been the case in previous years, the Senate bill does not include funding for the National Biosolids Partnership Environmental Management System for Biosolids program. Although not included, NACWA members and staff and the Water Environment Federation (WEF) have met with Senate staff and sent letters of support for the NBP program to urge Senators to support it in the final conferenced Interior spending bill.

House Passes EPA Budget Amid Blending Controversy
The U.S. House of Representatives May 19 approved the Environmental Protection Agency’s (EPA) budget for fiscal year (FY) 2006 after accepting an anti-blending amendment offered by Rep. Bart Stupak (D-MI) during consideration of the Department of the Interior, Environment, and Related Agencies Appropriations Act, 2006 (H.R. 2361) (http://www.nacwa.org/private/legreg/legupdate/leg_tracker.cfm) on the House floor. The amendment states that no fiscal year 2006 “funds from EPA’s budget may be used to finalize, issue, implement, or enforce the proposed [November 2003] policy of the EPA” (http://www.nacwa.org/advocacy/co/2005-05-19STUPAK.PDF).

NACWA asked its members to take action in a May 15 Special Edition FaxAlert (http://www.nacwa.org/private/faxalerts/051205.cfm) and also organized a May 16 coalition letter signed by 42 municipal, state and regional stakeholder groups (http://www.nacwa.org/advocacy/co/2005-05-16blend.pdf) opposing the blending amendment. NACWA then prepared and distributed a May 19 ‘Truth Alert’ (http://www.nacwa.org/advocacy/co/2005-05-19btruth.pdf) to all members of the House. The scare tactics used in the anti-blending campaign by some of the nation’s largest environmental activist groups alarmed many Representatives. NACWA staff and member utilities worked with municipal leaders and others to contact and meet with House members to ‘set the record straight.’ Although EPA Assistant Administrator for Water Benjamin Grumbles withdrew the November 2003 blending policy guidance document (http://www.nacwa.org/advocacy/co/2005-05-19blendltr.pdf) just hours before the bill went to the House floor, the amendment was introduced and ultimately accepted as part of the House measure.

H.R. 2361 includes $850 million for the EPA’s clean water state revolving fund (SRF) and $850 million for the drinking water (SRF). The bill sets aside $200 million for ‘congressional priorities’ that primarily fund individual projects in members’ districts, $40 million for programs of national and regional significance in the Science and Technology portion of the bill, and another $40 million under Environmental Programs and Management for projects and programs such as the National Biosolids Partnership (NBP). NACWA continues to urge Members of Congress and congressional staff to include $1 million in EPA’s FY 2006 budget to fund the activities of the NBP environmental management system program for next year. Projects selected for funding will not be identified until the Senate passes its appropriations measure and the two chambers go to conference to reconcile differences between their bills.