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Water Pollution House Panel Authorizes $20 Billion Over Five Years for Revolving Loan Fund
A House Transportation and Infrastructure subcommittee approved three separate bills Jan. 31 that would boost funding for the clean water state revolving fund, provide grants to curb sewer overflows, and fund pilot alternative water supply projects.
The Subcommittee on Water Resources and Environment agreed by a voice vote to send to the full committee for approval the Water Quality Financing Act of 2007 (H.R. 720), which would authorize $20 billion over five years for the clean water SRF for fiscal years 2008 through 2012.
Also agreed by voice votes were the Water Quality Investment Act of 2007 (H.R. 569), which would authorize $1.8 billion in grants to control sewer overflows, and the Healthy Communities Water Supply Act (H.R. 700), which would authorize $125 million to fund pilot alternative water supply projects.
Under the SRF program, the Environmental Protection Agency provides grants to states, and the states provide matching funds to establish a low-cost loan program to enable communities to upgrade wastewater treatment systems.
The Bush administration has not sought reauthorization for the revolving fund, preferring to turn the revolving fund into a self-sustaining loan program that is replenished by interest payments made on loans.
H.R. 720 would reauthorize the program at an annual funding level of $4 billion per year, well above the level of $1 billion contained in the fiscal year 2007 appropriations bill for EPA currently working its way through Congress. (See related story in this issue. )
The bill would extend repayment periods for revolving fund loans up to 30 years, require a state to use part of its funding to provide subsidies for disadvantaged communities, and authorize $75 million annually in technical assistance to rural and small wastewater treatment projects.
It also would direct the Government Accountability Office to study potential revenue sources to set up a Clean Water Trust Fund and encourage communities to consider "green infrastructure" such as the use of rain gardens to collect stormwater runoff. It also would use water quality benefits and a watershed approach as the criteria to prioritize which projects receive funding.
Nation's Clean Water at Risk
Subcommittee Chairwoman Eddie Bernice Johnson (D-Texas), who introduced the SRF bill, called the Clean Water Act the nation's "most successful environmental law," but he said it is imperiled because there is no money to replace or repair the aging and deteriorating wastewater infrastructure.
The state revolving fund's steady source of federal funding ran out when reauthorization expired in 1994. Since then, Congress has been unable to get any bills affecting the fund through the House or the Senate because of disputes over Davis-Bacon Act requirements that local prevailing wages be paid on projects receiving federal funds. Congress, however, has been appropriating funds for the SRF each year, albeit at declining levels.
"We face the real risk of losing the nation's clean water," Johnson said. She said the funding gap for capital improvements is estimated to range between $300 billion and $400 billion in the next 20 years.
Rep. Richard Baker (R-La.), the subcommittee's ranking member, agreed, saying there is no "contention" over the overwhelming nature of the aging wastewater infrastructure problem. However, Baker said he opposes the Davis-Bacon provisions because applying the prevailing wage law would raise the cost of projects.
He unsuccessfully offered an amendment on behalf of Rep. Thelma Drake (R-Va.) that would strike the Davis-Bacon language from the bill. The amendment, which was opposed by Johnson and all other Democratic members and at least one Republican, Rep. Steve LoBiondo (N.J.), sparked a debate among Democratic and Republican members over worker's rights to prevailing wages.
A second amendment offered by Rep. Charles W. Boustany Jr. (R-La.) was adopted. Boustany's amendment asked the Government Accountability Office to conduct a study by Jan. 1, 2008, of alternative public-private financing schemes to fund wastewater upgrades and repairs. "The federal government can't make up the [funding] shortfall all on its own," Boustany said.
Reduced Funding for Sewer Overflows
As for H.R. 569, the bill providing grants to control sewer overflows, Johnson replaced the original legislation with a substitute that would authorize the Environmental Protection Agency administrator to distribute $1.8 billion in grants, as opposed to the original $3 billion. The grants would help municipalities pay for improvements and upgrades to reduce the problem of overflows from sanitary sewer systems and combined systems.
Johnson said the reduced authorization level in H.R. 569
reflects the figure that would be acceptable to the Appropriations committees in
the House and Senate. She said the $1.8 billion would be a slight increase over
the $1.5 billion sought by Rep. Dave Camp (R-Mich.) for a similar bill (H.R.
624) in the 109th Congress. During that session, Camp was able to move H.R. 684
out of committee, but it died because no vote was taken on the House floor.
Baker supported Johnson's substitute.
The legislation approved by the panel would authorize $250 million in fiscal year 2008; $300 million in fiscal 2009; $350 million in fiscal 2010; $400 million in fiscal 2011; and $500 million in fiscal 2012.
Unlike the original H.R. 569, Johnson said the EPA administrator would be responsible for distributing funds only in fiscal year 2008. For subsequent years, the bill would require the administrator to develop a grants distribution formula for each state that is based upon the frequency and severity with which sanitary and combined sewer overflows occur.
"The states would then be responsible for distributing the grants within the state," Johnson said.
Combined sewer overflows occur in communities that have older sewer systems that combine both stormwater and sanitary sewage in the same pipe. Sanitary sewer overflows occur in communities with systems that carry only sewage.
The combined systems and separate systems are designed to overflow during wet weather, releasing the untreated wastewater into nearby rivers and streams to prevent excess flows from inundating the treatment plant. These overflows cause the receiving waters to be contaminated with pathogens and other pollutants in violation of water quality standards.
The subcommittee also approved H.R. 700, which would reauthorize $125 million for EPA's alternative water source program. Under this program, cities and towns have to provide up to 50 percent in matching funds for pilot water supply projects.
Although Baker supported the legislation, he said the grants would be difficult for rural and small communities to access as they would not have the ability to match 50 percent of the funds.
Reauthorization Draws Praise
EPA Assistant Administrator for Water Benjamin Grumbles said the agency is reviewing the legislation.
"We believe the key to infrastructure legislation is to incorporate our four pillars of sustainability, including full cost pricing which helps utilities recover the true value of infrastructure services," he said. "We also believe continued state and local funding, regulatory incentives, and enforcement of the Clean Water Act are critical to controlling sewer overflows. It's important for Congress to discuss not only the development of alternative water sources but the principles of beneficial reuse and water efficiency."
The House subcommittee's actions drew praise from the Clean Water Council, which represents underground construction contractors, manufacturers and suppliers of building materials, as well as National Association of Clean Water Agencies, which represents the country's publicly owned wastewater treatment plants.
Ken Kirk, NACWA's executive director, hailed the inclusion of a GAO study to consider revenue streams for a Clean Water Trust Fund, a concept the group has been advocating since the previous Congress.
Clean Water Action, an environmental advocacy group, though pleased by the SRF reauthorization, cautioned against the rush to embrace public-private partnerships and private financing. The group said private financing costs more than public investment because private companies must pay for contract and contract administration costs, third-party auditing, and taxes. These are costs that public utilities do not have to bear through use of public dollars.
By Amena H. Saiyid