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Concrete Products
Copyright 2002 by Intertec Publishing Corporation, a PRIMEDIA Company. All
rights reserved.

Tuesday, January 1, 2002

Volume 105; Number 1; ISSN Number 00105368

Federal Market News

Water a likely item for early 2002 agenda
by Cy Malloy

Legislation

Water infrastructure was the focus of two late fall hearings: 1) a session marking up H.R. 3178 in the full House Science Committee to facilitate the development of anti-terrorism tools for water infrastructure; and 2) a continuation of the Senate Environment and Public Works Committee series of hearings on wastewater and water infrastructure relative to water supply issues.

Significant drinking water and wastewater infrastructure
legislation is in the works and could be unveiled this month,
according to key lawmakers in the Senate Environment and Public
Works Committee. Senators Jim Jeffords (I-Vt.), the full committee
chairman, and Bob Graham (D-Fla.), chairman of the water
subcommittee, elaborated on their intentions during a session
outlining innovative water infrastructure funding approaches that
states and local communities could use to stretch government money
as far as possible.

Asked what such legislation should include, the Environmental
Protection Agency's (EPA) top water official, G. Tracy Mehan,
suggested some tinkering with the catch-all Clean Water State
Revolving Loan Fund (SRF) and the Drinking Water State Revolving
Loan Fund (DWSRF) as a means to more effectively utilize the
billions of dollars state governments receive each year. He
suggested lawmakers consider making permanent a state's ability to
transfer funds between the SRF and the DWSRF. He also recommended
pushing back the loan repayment deadline for the SRF from 20 years
to 30 years, using the same time frame that applies to the
DWSRF.

Chairman Graham affirmed the priority status the issue has with
the subcommittee. Senator Kit Bond (R-Mo.), the ranking member on
the appropriations subcommittee charged with EPA's budget, took
Graham's intentions a step further in saying he hoped Congress
would pass a water infrastructure bill before next October, which
marks the 30th anniversary of the Clean Water Act. Bond also
encouraged the White House and Congress to work towards larger
authorization levels for the SRF and DWSRF, currently $1.35 billion
and $850 million, respectively. (House and Senate leaders concur
with President Bush in backing no extra infrastructure funding in
the economic stimulus legislation.)

To date, the leading pieces of water legislation in Congress
include two bills. In the Senate, a bill has been proposed amending
the Federal Water Pollution Control Act to authorize appropriations
for state water pollution control revolving funds and other
purposes. The original sponsor of Bill S.252 is George Voinovich
(R-Ohio). Cosponsors total seven -- four Democrats and three
Republicans -- the last of which signed on in July 2001.

This legislation, introduced in February 2001 as the Clean Water
Infrastructure Financing Act of 2001, amends the Federal Water
Pollution Control Act to remove certain requirements for states
with respect to construction of treatment works under
capitalization grant agreements. It directs the EPA administrator
to assist states in establishing simplified procedures for small
water systems to obtain assistance under the Act. In addition, the
legislation requires revolving funds to be used only to provide
assistance for activities that have as a principal benefit the
improvement or protection of water quality of navigable waters. It
stipulates an extended repayment period and additional
subsidization with respect to loans made to financially distressed
communities from revolving funds. Reauthorization of $3 billion
appropriations for each of FY 2002 through 2006 for the revolving
fund program is also included.

In the House, Bill H.R.668 was similarly introduced last
February to amend the Federal Water Pollution Control Act to
authorize appropriations for state water pollution control
revolving funds and other purposes. Sue Kelly (R-N.Y.) is the
original sponsor. Of the 116 cosponsors, 62 are Democrats, 53 are
Republicans, and one is Independent. As the Clean Water
Infrastructure Financing Act of 2001, this legislation amends the
Federal Water Pollution Control Act as indicated in the Senate
bill.

Federal agencies

EPA. The agency's Municipal Support
Division (MSD) issued its Strategy for Fiscal 2002:

If the municipal wastewater management sector
is to improve upon gains made to date and prevent further water and
wastewater infrastructure deterioration, it must identify ways to
fund more effective maintenance and rehabilitation of existing
facilities as well as the construction of new facilities. We intend
to do that by working with our partners to increase funding and
flexibility for the State Revolving Funds, foster public-private
partnerships and greater participation of private capital,
encourage states and communities to direct funding toward the
highest priority. As America's population grows during the next 20
years, the nation will have to significantly increase spending to
continue to provide required levels of pollutant removal.

Annual Federal expenditures in current
dollars for water and wastewater have declined from nearly $10
billion in 1980 to about $2.5 billion today. The national
investment in water and wastewater capital has remained flat for
many years, but as infrastructure ages, operation and maintenance
costs are rising sharply.

Neither the federal government nor any other
stakeholder has the resources to satisfy these capital investment
needs. By 2010, the population served by wastewater collection and
treatment systems is expected to increase by some 30 million
people, increasing pollutant loadings.

If current levels of treatment are not
increased, by 2016 wastewater treatment plants will discharge about
as much total biochemical oxygen demanding pollution as they did in
1972, before the nation adopted the landmark secondary treatment
standard. Many wastewater treatment and collection systems are
decades old and may be reaching the point at which major
rehabilitation or replacement is necessary.

Federal Highway Administration. In order
to alert the House of Representatives that the current highway bill
expires in September 2003, the House Subcommittee on Highways and
Transit held a hearing on some of the success stories of the
Transportation Equity Act for the 21st Century (TEA-21). The
hearing was organized by Chairman Petri (R-Wis.), along with the
American Road and Transportation Builders Association and its
Transportation Coalition.

Department of Agriculture-RUS/USDA.
Senate Agriculture Chairman Tom Harkin (D-Iowa) revealed that his
farm bill proposal would cover five years, spending roughly $175
billion -- an expenditure comparable to the House-passed bill.
Among highlights in the rural development title are the creation of
a Rural America Infrastructure Development Account and provisions
for full funding of pending rural development loan and grant
applications.

This section of the bill allows the government to clear the
existing backlog of pending rural development loan and grant
applications, specifically for community facility grants and direct
loans, water and waste disposal grants and direct loans as well as
rural water and wastewater technical assistance and training
grants. Additionally, solid waste management grants will be
eligible for funding under this provision. The RUS program serves
rural towns with a population of fewer than 10,000.

Allied organizations

American Society of Civil Engineers. The
Senate Environment and Public Works Committee heard testimony from
ASCE supporting a variation of the Water Infrastructure Network
(WIN) report recommendation that Congress should consider
legislation creating a "Federal Bank for Infrastructure
Modernization" (H.R. 1564) within the Federal Reserve System
to provide approximately $500 billion over 10 years to upgrade
America's failing infrastructure. On behalf of any state or local
government, any Native American tribe, or any regional or
multi-state organization, the bill stipulates funding for certain
types of capital infrastructure projects dealing with
transportation, schools, drinking water and wastewater or hazardous
waste.

Washington, D.C.-based Cy Malloy heads
Federal Industry Consulting Associates which, on behalf of
construction and building interests, tracks Capitol Hill and
federal agency regulatory, funding, procurement and specifications
issues.

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