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Tuesday, November 30, 2004

Air, Water & Climate

WATER; Treatment Officials Propose Fee on Bottled Beverages to Aid Infrastructure Fund

Marty Coyne, Greenwire senior reporter

Wastewater treatment plant managers want to more than double federal funding to upgrade or overhaul aging water and sewer systems by way of a 5 cent tax on bottled beverages, including water and soft drinks. The Association of Metropolitan Sewerage Agencies, a trade group representing wastewater managers, has drafted legislation authorizing a tax on bottled beverages under new Clean Water Act and Safe Drinking Water Act trust funds.

The AMSA "discussion draft" bill aims to raise $5 billion annually for two trust funds administered under the Clean Water Act and Safe Drinking Water Act. Wastewater plants would receive $3 billion for upgrades, while drinking water plants would get $2 billion, according to an AMSA summary of the proposal.

EPA already administers loan programs that leverage federal and state dollars on water and sewer upgrades. But AMSA claims the nation needs the water and sewer trust funds to augment woefully inadequate state revolving fund (SRF) monies, which Congress is poised to cut by more than $300 million from existing levels due to federal budget constraints.

The clean water trust fund would provide $5 billion beyond the SRF for wastewater upgrades, while the drinking water trust fund would funnel $2 billion, the AMSA proposal states. Beverage manufacturers often use municipally provided water to make drinks that consumers ultimately release as billions of gallons of wastewater. Each group places a significant burden on water and sewer systems, according to AMSA.

The beverage tax was one of a handful of funding options in a 2003 AMSA report. AMSA Executive Director Ken Kirk said the intent of the bill is to equitably spread the cost of water and sewer upgrades.

With the trust funds and the increased SRFs, the legislation would raise total water infrastructure spending to $9 billion each year, according to AMSA.

AMSA met with environmental groups yesterday to discuss the draft bill, Kirk said. Officials from the Natural Resources Defense Council and Clean Water Action who attended the meeting were not immediately available for comment. Drinking water plant managers were also reviewing the AMSA proposal at press time and declined further comment, according to an official with the American Water Works Association.

AMSA plans to vet the proposal with a wide variety of groups before lining up congressional sponsors to introduce the bill next year.

But a Republican Congress leery of trust funds, combined with early concerns from beverage manufacturers, could pose a potential hurdle to the passage of AMSA's proposal.

"We would not be in favor of beverage taxes," said International Bottled Water Association spokesman Stephen Kay, who had not seen the AMSA proposal. He said public water is used for less than 25 percent of nation's bottled water.

On Capitol Hill, Republican aides have said that any water tax is politically unpopular despite the success of programs of multibillion-dollar trust funds for the nation's airport and highway infrastructure (Greenwire, Aug. 20, 2003).



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