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CongressDaily/A.M.

Thursday, January 30, 2003

ENVIRONMENT

Support Growing For Water Improvement Trust Fund

With state and local governments facing an impossible $500 billion price tag for maintaining the nation's water systems over the next 10 years, support is quietly growing on Capitol Hill and K Street for the creation of a dedicated federal trust fund to pay for repairs and upgrades to pipes and treatment facilities.

Although congressional staff and stakeholders have only
recently begun discussing the idea of a trust fund, sources said
the final product could include a mixture of taxes on water use
as well as possible taxes on so-called non-point sources of
water pollution, such as pesticides or other agricultural
byproducts.

Congressional sources and water industry insiders
privately acknowledge the debate over water infrastructure
spending is clearly headed in the direction of a dedicated trust
fund.

"There's definitely a move underway to look at the trust
fund idea," one lobbyist said.

A congressional source agreed, arguing "we need to get
this off budget" to ensure long-term capital investment exists
to maintain the water system.

However, the process of creating a fund modeled after
the Highway Trust Fund - which Congress uses to back state and
local highway and mass transit projects - will be a long and
grueling one, all sources agree, with some predicting
legislative proposals are at least two years off.

Wastewater treatment officials, with the blessing of
Senate staff, are in the early stages of developing a list of
recommendations for the creation of a trust fund. Although
sources familiar with the effort declined to discuss specifics,
they did say recommendations should be completed sometime this
year.

Senate sources said while many lawmakers may be
interested in the idea of a trust fund, they warned any plan
will have to ensure taxes are spread as equitably as possible.

These sources also noted proponents of a dedicated fund
will also have to assuage the concerns of drinking water
suppliers before Congress can take the issue up in earnest.
Although drinking water authorities receive some of the benefits
of water infrastructure spending, they receive substantially
less than water treatment systems.

But because most trust fund ideas thus far have centered
around the use of "user fees" to generate revenues, drinking
water suppliers likely would shoulder the burden of the costs.

One option that reportedly has been tentatively
discussed is setting up a tax on non-point sources, possibly by
taxing products such as pesticides that are washed into water
systems as a result of farming. However, sources said such a
scheme would surely incur the wrath of agribusiness and chemical
interests, as well as their backers on Capitol Hill, making the
prospects of such a plan unclear.

Over the last several years, the issue of water
infrastructure spending has been slowly bubbling to the surface
in Congress.

A coalition of wastewater and drinking water
organizations, labor unions, and civil engineers in the spring
of 2000 launched the Water Infrastructure Network, warning the
Clinton administration and Congress of an estimated funding gap
of $23 billion a year between existing infrastructure
investments and those needed to replace or upgrade aging and
failing pipes.

All told, the group argued waste water and, to a lesser
extent, drinking water systems nationwide would have to invest
$1 trillion or more over the next 20 years in repairs and
upgrades to ensure localities could continue to meet Clean Water
Act pollution levels.

The cause has attracted a diverse and bipartisan group
of supporters in the House and Senate. House Science Chairman
Boehlert was an early backer of addressing the issue, as was
Rep. Peter DeFazio, D-Ore.

Earlier this month, Reps. Sue Kelly, R-N.Y., and Ellen
Tauscher, D-Calif., introduced a five-year, $25 billion water
upgrade and repair spending proposal.

In the Senate, Sen. Mike Crapo, R-Idaho, who chairs the
Senate Environment and Public Works Fisheries, Wildlife and
Drinking Water Subcommittee, along with Environment and Public
Works ranking member James Jeffords, I-Vt., have taken the lead
on water infrastructure.

Crapo and Jeffords plan to introduce legislation in the
coming weeks based on legislation the committee approved during
the last session providing states with $35 billion over five
years in federal infrastructure grants, sources said. By John
Stanton

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