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January 12, 2010

     
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Government Relations


2009 Review, 2010 Preview

2009 was a busy year for NAWC on the government relations front. The new administration and Congress started with an aggressive agenda that has given us both opportunities and challenges. 2010 promises to be nearly as busy, culminating in some very important congressional elections.

ARRA

NAWC started 2009 very with a focus on the massive economic stimulus bill (H.R. 1, the American Recovery and Reinvestment Act, or ARRA), that passed into law in February. Broadly speaking, ARRA has two parts — a taxation package and an appropriations package — and there were import provisions in both.

The taxation provisions we were particularly interested in — and supported — included $15 billion in additional private activity bond cap made available for “exempt facilities,” including water and sewerage. This new bonding capacity, along with the existing capacity ($28 billion) for all categories was exempted from the alternative minimum tax (AMT) for 2009 and 2010 as well as any refunding of bonds issued between 2004 and 2009. Also, the 2008 “bonus depreciation” was extended for capital expenditures incurred in 2009.

On the appropriations side, $6 billion was put toward water infrastructure. These funds are being funneled through the existing drinking water and clean water State Revolving Funds (SRFs), something for which NAWC strongly advocated. Some other water organizations were looking to circumvent the SRFs and have the funds doled out in some #ff0000 grant programs. The ARRA rules for the new SRF funding stipulated that 50 percent must be available in grants.

One of our heaviest lifts was correcting language in the first draft of the bill that would have, for the first time, limited private utility access to the drinking water SRF. The language was apparently the product of a simple oversight and not an intentional attempt to limit investor-owned utility (IOU) access. Even so, due to the speed at which the bill was moving and the sheer size of the overall package, we had to work hard and fast to make sure this bad precedent was not set. Thanks to a lot of hard work by NAWC members and our allies in Washington, including National Association of Regulatory Utility Commissioners (NARUC), American Water Works Association (AWW) and the Association of State Drinking Water Administrators (ASDWA), the language was corrected.

Sustainable Water Infrastructure Investment Act

On January 14, Congressman Bill Pascrell (D-NJ) reintroduced the Sustainable Water Infrastructure Investment Act (SWIIA), H.R. 537. This bill, which would bring water and wastewater projects out from under the state volume cap on private activity bonds, is strongly supported by NAWC.
NAWC has been working on attracting cosponsors for the bill, which so far has garnered 27 — already more than the bill did in previous sessions of Congress — including Congressman Charlie Rangel (D-NY), the chairman of the powerful Ways and Means Committee.

IOU Access to Clean Water SRF – SRF Reauthorization

On April 14, the Senate Environment and Public Works Committee completed its work on a combined drinking water and clean water State Revolving Fund (SRF) reauthorization bill, S. 1005. In an important step forward, the bill allows for full IOU access to the clean water SRF, which we support and worked hard to achieve.

The bill was sponsored by Sen. Cardin (D-MD), chairman of the subcommittee of jurisdiction, and cosponsored by full committee chairman Sen. Barbara Boxer (D-CA), and corresponding Republican Sens. Inhofe (R-OK) and Crapo (R-ID).

The full Senate must now consider S. 1005, though there are some contentious issues surrounding the bill that makes the timing of its consideration uncertain. The House passed a clean water–only SRF reauthorization earlier this year, without the IOU access language. We have been reaching out to the House and key staff in advance of final legislative negotiations.

Climate Change

In the summer, the House of Representatives passed a climate change bill, officially the American Clean Energy and Security Act, H.R. 2454. The passage was close 219-212, and largely along party lines, with all but 44 Democrats supporting the bill, and Republicans for the most part opposing it.
 
The massive bill has many provisions, however at its core the bill establishes a cap-and-trade system designed to reduce greenhouse gas emissions to 17% below 2005 levels by 2020 and 83% by 2050 with an absolute cap established on emissions and allowing for a market for trading emissions permits or “allowances.”  
 
A counterpart Senate bill, S.1733 passed through the Environment and Public Works Committee but has not yet been considered by the full Senate. It contains a water adaptation program that includes new grants for infrastructure improvements for which private owners and operators would be eligible.  

Chemical Security Legislation

In the fall, the House passed H.R. 2868, the Chemical and Water Security Act of 2009, mostly along party lines, 230–193. Twenty-one Democrats opposed the bill. Under the legislation, drinking water and wastewater utilities will remain exempt from the Department of Homeland Security’s CFATS chemical facility security regulations. However, drinking water systems will be required to update their existing vulnerability assessments (VAs) and emergency response plans (ERPs) at least every five years, and complete site security plans (SSPs) detailing how security vulnerabilities are being addressed. Wastewater utilities will also have to complete and keep updated VAs, ERPs and SSPs. H.R. 2868 grants EPA the regulatory oversight of drinking water and wastewater facilities.

2010

The New Year too will bring challenges and opportunities, though Congress will likely not be in session as much since 2010 is an election year. The first order of business will be completion of the high-profile health care bill. Once that is out of the way, it is generally agreed that Congress will quickly pivot to jobs creation legislation. The House has already passed a version of such a bill, but at this point it is unclear if that relatively narrow bill will stay so narrow. Congress at some point is expected to take up legislation extending some expiring tax provisions, including perhaps some of the bonding provisions in 2009’s ARRA.

There is a desire to — at last — pass an SRF reauthorization bill in 2010, but there are still hurdles to clear in both the House and Senate. And with so many high-profile legislative “to-dos” on the Congressional agenda, the timing for SRF reauthorization consideration is at best unclear.

The Democratic Leadership and the administration are saying they would very much like to pass a climate change bill into law this year. However, with the House passage of such a bill in 2009, the action is in the Senate, and there is a sense that after the contentious health care debate, there will be limited interest in the Senate to take on another high-profile partisan fight before the November elections.

NAWC will continue working on attracting cosponsors to Congressman Pascrell’s water bond bill, H.R. 537. We will also be working to promote it in the Senate and to develop strategies toward securing final passage of the bill.