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Corporate Taxes, Bottle Fee for Trust Fund Pushed by National Wastewater Utility Group
The head of a wastewater utility group Oct. 19 said he had identified revenue sources for setting up a federal trust fund to finance upgrades of aging sewage plants, water quality improvements, wetlands research, and programs targeting regional water bodies such as the Chesapeake Bay and Great Lakes.
Ken Kirk, executive director of the National Association of
Clean Water Agencies, told participants at the Clean Water Act: Law and
Regulation seminar that the trade association would release a list of revenue
sources in December that could be used to establish a trust fund as proposed in
the Clean Water Trust Act of 2005 (H.R. 4560; 79 DEN A-3, 4/25/06 ).
Rather than directly raising $7.5 billion each year for the Clean Water Trust
Fund, H.R. 4560 would direct the Environmental Protection Agency to submit its
recommendation for "an equitable system of user fees" to Congress. Congress
would have to approve the fees, which would be used to come up with the $7.5
billion, in a separate legislation.
Kirk told seminar participants that a "dedicated, deficit-neutral, five-year,
Clean Water Trust Fund" could be set up either by levying a corporate
environmental tax similar to the one that was used for Superfund Trust Fund or
by imposing a fee on bottled water.
"We are not going to put all our eggs in one basket.... We are going to look at
a whole slate of revenue source options," Kirk said.
Revenue Source Needed to Move Bill
Lack of a dedicated revenue source has been the primary issue holding up support
for H.R. 4560, which Rep. John Duncan (R-Tenn.) introduced in December 2005,
according to Jonathan Pawlow, Republican counsel to a House Transportation and
Infrastructure subcommittee on water resources and environment.
"If there is money in the bank, other issues will get resolved as well," Pawlow
told participants Oct. 19 in a separate seminar panel discussing the status of
current and upcoming Clean Water Act legislation.
Pawlow told BNA Oct. 20 that it is "conceivable" that H.R. 4560 would be
reintroduced in the 110th Congress, which will convene in January 2007. He said
Duncan would be "amenable" to reintroducing the bill in the upcoming Congress
with the current language requiring EPA to recommend an "equitable and fair" fee
structure.
As for inserting language that calls for a fee or taxes, Pawlow said, NACWA and
others have been floating the same concept since August 2003. "It appears that
[Duncan] is not prepared to move on any particular proposal until its been fully
vetted" for its impacts on industry and customers, however, he said.
Pawlow also said it was unclear whether Republicans or Democrats will control
the House of Representatives. If Democrats take over, then the issue of
including Davis-Bacon Act provisions in the bill will arise. The Davis-Bacon Act
requires workers to be paid "prevailing wages" for any construction project that
is federally funded.
Democrats and some Republicans have attempted to introduce bills to reinstate
the corporate environmental taxes, which expired in 1995, to replenish the
Superfund Trust Fund but to no avail, as EPA and the White House have clung to
their steadfast opposition to increased taxes (46 DEN A-3, 3/9/06 ).
EPA Strategy Not Enough to Close Gap
The EPA Office of Water is encouraging both wastewater and drinking water
utilities to embrace its sustainable water infrastructure strategy, which calls
for managing assets, conserving water, taking a watershed approach, and charging
customers for the full cost of providing wastewater services.
Pawlow said Duncan supports EPA's sustainable infrastructure strategy, but he
recognizes that these measures will not be enough to close the funding gap,
which EPA roughly estimates will be $540 billion by 2020 if the utilities do not
increase their revenue base.
Kirk, however, dismissed EPA's sustainable infrastructure strategy, saying it
allows the federal government to avoid taking responsibility for assisting with
utility upgrades, while placing the burden on local governments.
He excoriated the EPA for its plans to eliminate federal funds for the Clean
Water State Revolving Fund (SRF) by 2018. EPA said it plans to provide $6.8
billion from 2004 through 2011, which would provide enough money to establish a
self-sustaining revolving rate of $3.4 billion-a-year for the years 2015 through
2040.
Kirk said he blames both the Clinton and the Bush administrations for targeting
the SRF for budget cuts and for failing to take on the aging wastewater
facilities issue.
Under the Clean Water State Revolving Fund, state governments are provided with
federal money based on need. States then make low-interest loans to communities
to construct municipal wastewater infrastructure and for other projects. Over
time, the fund is expected to "revolve" and sustain itself through funds
leveraged from other sources and from loan repayment.
In March, Benjamin Grumbles, the agency's assistant administrator for water,
told BNA that EPA plans to provide $6.8 billion for the SRF from 2004 through
2011, which would yield enough money to establish a self-sustaining, revolving
funding rate of $3.4 billion-a-year for the years 2015 through 2040 (58 DEN A-2,
3/27/06 )
NACWA does not expect the political climate change will change the federal
government's mind about funding the SRF, Kirk added.
By Amena H. Saiyid