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Volume 13, No. 26     June 23, 2004

Highlight story from the current issue of WaterWeek

Senate panel approves infrastructure bill

The Senate Environment and Public Works Committee on June 23 approved a water infrastructure financing measure (S 2550) from Sen. Mike Crapo, R-Idaho, that fleshes out a draft version that had been circulating in recent weeks.

Among the amendments adopted in the markup process were provisions for transitioning to a needs-based approach for allocating Clean Water State Revolving Loan (SRF) capitalization grants to states (similar to the allocation for the Drinking Water SRF) and regarding application of federal "prevailing wage" requirements. An additional amendment would authorize $1 billion annually for grants to help small water systems comply with arsenic and other drinking water standards.

Other amendments include authorizations for

• funding of specific projects in several states,
• $250 million/yr for five years for combined sewer overflow program grants,
• $40 million/yr for five years to address lead contamination in school drinking water,
• $20 million to address lead problems in the District of Columbia, and
• studies by the National Academy of Sciences (NAS) of the DC lead situation and national water supply demands and a US Geological Survey study of perchlorate occurrence in drinking water.

While the complete text of the bill and the amendments was not available at press time, the legislation, which is not expected to pass this year, would ramp up authorized spending for the Drinking Water SRF from $1.5 billion in FY2005 to $6 billion in FY2009, for a five-year total of $15 billion, and do likewise for the Clean Water SRF, to $20 billion.

It would also require prioritization of SRF loans, with higher priority going to utilities with plans to manage assets, use "green" technologies, identify sources of revenue and review alternative treatment options.

Also, if appropriations in any year fail to reach $2.5 billion, states would have to set aside 10 percent of their SRF allocations for grants to cover up to 55 percent of a project's cost. States, however, could waive the set-aside if the time for processing loan applications in the previous year did not exceed 90 days. If SRF appropriations are more than $2.5 billion in any fiscal year, states would have to set aside 2.5 to 5 percent of their new federal funds for such grants.

The bill would also:

• permanently authorize governors to transfer up to a third of their Clean Water SRF capitalization funds to the Drinking Water SRF program, and vice versa.
• authorize up to $25 million annually in grants to qualified, nonprofit technical-assistance providers to set up separate SRF programs to help small systems plan, design and otherwise predevelop projects and cover the cost of short-term equipment replacement.
• expand eligibility for SRF loans to include preconstruction activities, security projects, and distribution system upgrades.
• authorize $5 million for an NAS study to determine whether public water system rates are adequate with regard to cost of service, including operations, maintenance, capital replacement and regulatory compliance.