Congress Struggles with Water Funding Expectations

June 1, 2002
The Senate Environment and Public Works Committee in late April postponed for a third time the markup of a sweeping $35 billion water infrastructure bill. At press time it remained unclear whether the bill will be considered before Congress leaves this fall because of wide differences of opinion between committee members, congressional staff said.

By Maureen Lorenzetti

The Senate Environment and Public Works Committee in late April postponed for a third time the markup of a sweeping $35 billion water infrastructure bill. At press time it remained unclear whether the bill will be considered before Congress leaves this fall because of wide differences of opinion between committee members, congressional staff said.

S. 1961 reauthorizes the Safe Drinking Water Act and the Clean Water Act and dramatically expands revolving loan accounts used to fund water projects.

Some congressional observers doubt whether the legislation can be enacted before the fall elections because of the conflicting views within industry, the EPA and the White House over how much money is truly needed to update municipal water systems. An anticipated report by EPA is expected to estimate the gap between what is being spent on water now and what will be needed in the future at $650 million over the next 20 years, according to Debra Coy, an analyst with Schwab Capital Markets.

Nevertheless, the active debate that is now going on in both the Republican-led House and the Democratic-controlled Senate will likely pave the way for a sweeping water bill next year, according to Coy and industry lobbyists.

Meanwhile, lawmakers appear divided over what guidelines municipalities should follow to qualify for federal funds; also up in the air is the formula US regulators will use to determine project funds in individual states.

The Senate Environment Committee also heard testimony from water groups on the need for more security-related funding. Municipal officials told lawmakers they need an additional $4 billion to protect against possible threats to water supplies and wastewater treatment plants. The money would pay for intruder alert systems, monitoring devices, and other equipment designed to prevent sabotage to treatment equipment. Municipalities also want $700 million to conduct vulnerability assessments.

While industry and law enforcement officials have generally agreed it is unlikely a terrorist could successfully contaminate a local water supply, there is a much higher probability that an individual treatment plant could be targeted.

Since the Sept. 11 terrorist attacks, Congress has earmarked about $90 million for water security assessments, but it appears unlikely lawmakers will be willing to spend too much more given other constraints in the federal budget.

In other congressional action, the House Ways and Means Committee like its Senate colleagues, decided to postpone action on legislation that could have dramatically boosted federal spending for water projects. House leaders temporarily shelved action on a proposed tax code change that would have authorized $25 billion for water infrastructure projects and given states more latitude issuing bonds to fund water and sewer projects.

Committee Chairman Bill Thomas (R-CA) pledged to hold hearings on the issue later this year to gauge support for the provision among his fellow committee members.

Title III of HR 3930 would have reauthorized the SRF for the next five years and was designed to give states the opportunity to encourage private investment by placing water infrastructure projects outside a state's tax-exempt bond cap.

Proponents of the measure said the proposal would in effect give states an additional $400 million per year for water infrastructure projects.

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