Congress Adjourns - December 2002

The 107th Congress adjourned sine die on November 22, 2002, after passing President Bush's Department of Homeland Security Bill and agreeing to a Continuing Appropriations Resolution to keep the Government funded until January 11, 2003. The 108th Congress will convene on January 7, 2003 with the Republicans controlling both Houses of Congress and the Presidency for the first time since 1953 (other than the 50-50 split in the pre-Jeffords 107th Senate).

Although the 107th Congress will not be remembered for enacting an abundance of legislation, NAWC achieved two notable successes. When the Bioterrorism Bill passed in June, NAWC ensured that the language providing funding for security vulnerability assessments included all systems, regardless of ownership. Then EPA had to be persuaded that the Bioterrorism legislation superseded existing language in the Safe Drinking Water Act precluding grants to privately-owned entities. As a result NAWC companies have received about $3 million in assistance for vulnerability assessments, the first time that grants, rather than loans, have been available to private systems.

Investor-owned water utilities can also be pleased with the final result of the fight over Federal funding for drinking water infrastructure. Although the WIN coalition (composed of virtually every drinking water and wastewater group except NAWC, plus state and local government associations) lobbied long and loudly for more than $60 billion in Federal grants, at the end of the Congress nothing had been enacted.

Furthermore, the two bills reported out of Senate and House committees provided loans, not grants, and included virtually all of the accountability provisions (such as full cost-of-service rates) that NAWC had lobbied for. In fact, after the Senate Committee on Environment and Public Works acted on S 1961, NAWC and its H20 coalition allies were virtually the only groups endorsing the bill. The many NAWC companies who were involved in this legislative battle should be commended for their successful efforts.

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107th Congress Wrap Up - December 2002

The following is a synopsis of bills NAWC reported on throughout the 107th Congress:

S 1961, The Water Investment Act of 2002.
S 1961, sponsored by Senator Bob Graham (D-FL) sought to reauthorize both the DW-SRF and CW-SRF, increase funding, and bring needed reforms to both funds. The bill originally had the influential backing of Senators Jeffords (I-VT), Smith (R-NH) and Crapo (R-ID). Specifically, S 1961 required as a condition of receiving SRF assistance that systems consider public-private partnerships and consolidation. Additionally, it required systems receiving SRF assistance have in place both a rate structure that reflects the actual cost of service and an asset management plan. Notably, S 1961 also contained an innovative program designed to assist disadvantaged consumers, as opposed to utilities. On May 17, 2002 the Senate Environment and Public Works Committee in a contentious mark-up favorably reported S 1961 with amendments. Eventually, partisan disagreements over prevailing wage provisions and state allocations (in the CW-SRF) brought this bill to a standstill in the Senate.

S 2813, The Water Quality Investment Act of 2002.
Introduced on July 29, 2002 by Senator Bob Smith (R-NH), S 2813 was similar to S 1961 as originally introduced except that compliance with the accountability provisions was to be certified by utilities to the states. It was never considered by the Committee.

HR 3930, The Water Quality Financing Act of 2002.
HR 3930 contained similar reforms as S 1961 (see above), but it only applied to the CW-SRF and did not extend private utility access to the CW-SRF. On March 20, 2002 the Committee on Transportation and Infrastructure favorably reported HR 3930 with an amendment requiring prevailing wages to be paid pursuant to the Davis-Bacon Act. On April 17, 2002, the House Ways and Means Committee stripped the private activity bonds section from the bill. Mirroring the Senate, the extraneous labor issues precluded further movement of the bill.

HR 2207, Amending the Internal Revenue Code of 1986.
On June 14, 2001, Representative Karen Thurman (D-FL) introduced legislation to take water and sewage facilities out from under the state volume caps for private activity bonds. Sent to the Ways and Means Committee, HR 2207 gathered 20 cosponsors, four of them Republicans. Thurman's political affiliation, not the merits of HR 2207, impeded progress for this bill. Due to redistricting, Rep. Thurman faced a tough election and the Republicans were in no mood to grant legislative favors that could assist her in her campaign. (Rep. Thurman lost 46% to 48% to Republican Virginia Brown-Waite.)

Water Utility Security Bills

S 1593, The Water Infrastructure Security and Research Development Act.
Sen. James M. Jeffords (I-VT) introduced S 1593 that authorized $72 million over 6 years in grants to be administered by EPA to research institutions for research to improve the security of water supply systems. This bill was reported out of committee on November 11, 2001, but was never brought before the Senate floor. (Ultimately, $15 million for EPA security research was included in HR 3448, see below.)

S 1608, Providing grants to drinking water and wastewater facilities.
Senator Bob Smith introduced S 1608, authorizing $50 million in grants to publicly or privately owned drinking water or wastewater facilities to meet immediate security needs. Eligible projects included categories such as security staffing and installation and maintenance of fencing, gating, lighting and closed circuit television. Specifically excluded are vulnerability assessments and large capital improvements (infrastructure). The bill passed the Senate on December 20, 2001 and was introduced in the House on January 23, 2002.

S 1765, The Bioterrorism Preparedness Act of 2001.
Considered with HR 3448
On December 20, 2001, the Senate approved the anti-terrorism bill, S 1765 sponsored by Senators Kennedy (D-MA) and Frist (R-TN). S 1765 did not include drinking water provisions but was considered in a joint conference with HR 3448, which was ultimately enacted (see below).

HR 3178, The Water Infrastructure Security and Research Development Act.
Rep. Sherwood L. Boehlert (R-NY) introduced HR 3178 which sought to authorize $12 million annually through FY 2006 to the EPA to provide funding to support research and development projects for water infrastructure security. The bill passed the House on December 18, 2001 but failed to make any progress in the Senate. (Ultimately, $15 million for EPA security research was included in HR 3448, see below.)

HR 3448, The Bioterrorism Preparedness Act of 2001.
Passed
On June 12, 2002, HR 3448 became Public Law 107-188. HR 3448, the Tauzin (R-LA)-Dingell (D-MI) bioterrorism bill authorizes $160 million in financial assistance to be administered by EPA for community water systems to conduct vulnerability assessments, develop emergency response plans and make physical and electronic security enhancements. "Community water systems" by definition includes all systems, regardless of ownership. A major change in the bill made in conference is that the vulnerability assessments must be submitted to EPA instead of merely being certified. Vulnerability assessments are to be submitted to EPA by March 31, 2003, in the case of systems serving a population of 100,000 or more; by December 31, 2003 for systems serving 50,000 or more; and by June 30, 2004 for systems serving 3,300 or more. During consideration by Congress, NAWC and other water associations strenuously opposed, for security reasons, making vulnerability assessments available to the Government. To meet these concerns the conferees added provisions exempting this information from the Freedom of Information Act (FOIA) and directing EPA to come up with protocols to protect the assessments from unauthorized disclosure. Additionally, HR 3448 authorized $15 million for FY 2002 and "such sums as may be necessary" for FY 2003-05 for EPA security research.

Department of Homeland Security

HR 5005, Homeland Security Act of 2002.
Passed
On November 25, 2002, President Bush signed into law HR 5005 creating the Department of Homeland Security. Twenty-two separate federal agencies will combine to form this Cabinet level agency tasked to protect the United States from terrorism. Tom Ridge is expected to become the new secretary of the Department. HR 5005 also protects the nation's critical infrastructure by establishing a new Information Analysis and Infrastructure Protection Directorate. The Directorate will collect intelligence and identify possible threats to vital infrastructure including drinking water systems. Notices containing security information will be sent to the water sector via the Information Sharing and Analysis Center (ISAC). ISAC is designed to create a more efficient method of communication between water utilities and the top levels of government.

S 1602, Chemical Security Act of 2001.
On November 14, 2002, Senator Jon Corzine (D-NJ) proposed his bill S 1602 as an amendment to the Homeland Security bill, HR 5005. S 1602, intended to protect the public against the threat of chemical attacks and terrorism, and would have required the water industry to duplicate many mandates already required under HR 3448, the Bioterrorism Act. The amendment was not adopted.

Appropriations

FY 2002 EPA Appropriations
On November 8, 2001, Congress approved EPA's FY 2002 funding at $7.9 billion. That is an increase of $75 million from the previous year and almost $600 million more than what the Bush administration requested. Funding provided $850 million for the drinking water state revolving fund (DW-SRF) and $1.35 billion for the clean water state revolving fund (CW-SRF). Congress also passed a $29 billion emergency supplemental appropriations bill just before the 2002 August recess. Within the supplemental bill, EPA sought to provide $50 million in financial assistance to smaller systems for vulnerability assessments in addition to the amount provided in an earlier bill for large (over 100,000 population) systems. However, President Bush vetoed the portion of that bill that included funding for drinking water vulnerability assessments because of other provisions that the President deemed not related to anti-terrorism activities.

FY 2003 EPA Appropriations
The Senate approved funding at $8.3 billion for FY 2003 with $875 million for the DW-SRF and $1.45 billion for the CW-SRF. The House approved total EPA FY 2003 funding at $8.2 billion with $850 million for the DW-SRF and $1.3 billion for the CW-SRF. Congress adjourned before House and Senate conferees could resolve differences in the overall bill (VA, HUD and Independent Agencies).

HR 2299, Department of Transportation Appropriations Bill.
Passed
On May 2, 2000, the Department of Transportation proposed rules restricting the hours of service of drivers, thereby changing the current emergency exemption for utility drivers. Senator Jim Inhofe (R-OK) responded with an amendment to the Transportation Appropriations Bill that offered a "sense of Congress that the Secretary of Transportation should not take any action that would diminish or revoke any exemption in effect on the date of the enactment of [the appropriations bill] for [commercial] drivers of vehicles." The Transportation appropriations bill was signed into law on December 18, 2001.

Arsenic

S 1299, The Community Drinking Water Assistance Act.
Senator Pete Domenici's (R-NM) bill authorized $1.9 billion to create a program to provide financial assistance to "small" communities (including Albuquerque, NM) to help achieve or maintain compliance with drinking water standards. S 1299, sent to the Committee on Environment and Public Works, attracted a total of 7 cosponsors--5 Democrats and 2 Republicans.

Brownfields

HR 2869, The Small Business Liability Relief and Brownfields Revitalization Act.
Passed
On January 11, 2002, President Bush signed into law HR 2869 sponsored by Representative Paul Gillmor (R-OH). HR 2869 amends the Comprehensive Environmental Response, Compensation, and Liability ("Superfund") Act of 1980 to promote the cleanup and reuse of brownfields, including financial assistance for brownfields revitalization.

MTBE Bills

S 670, The Renewable Fuels Act of 2001.
Senator Daschle (D-SD) introduced S 670 which sought to eliminate MTBE and to increase production and use of ethanol. This bill managed to gain 4 cosponsors and never left the Committee on Environment and Public Works.

S 892, The Clean and Renewable Fuels Act of 2001.
Senator Harkin (D-IA) introduced S 892 on May 15, 2001, seeking to phase out the use of MTBE and to promote the use of renewable fuels. This bill only gained one Democrat sponsor and died in the Committee on Environment and Public Works.

S 950, The Federal Reformulated Fuels Act of 2001.
On September 25, 2001, the Environment and Public Works Committee approved S 950, sponsored by Senator Bob Smith which would ban MTBE as a gasoline additive four years after enactment. The bill required gasoline sold in areas with severe air pollution problems to contain at least 2 percent oxygen by weight as well as authorizing $400 million to help clean up MTBE contamination from leaking tanks. This bill with 7 cosponsors was never brought up for vote on the Senate floor.

HR 532, Providing Funding for MTBE Contamination.
Representative Capps (D-CA) introduced HR 532, a bill to provide funding for MTBE contamination. This bill died in the Committee on Energy and Commerce with 3 cosponsors.

HR 608, Amending Section 211 of the Clean Air Act.
Representative Greg Ganske (R-IA) introduced HR 608 on February 14, 2001. HR 608 sought to amend the Clean Air Act to prohibit the use of MTBE and to promote the use of renewable ethanol. The bill, with 13 Democrat cosponsors and 22 Republican cosponsors, never made it further than the Committee on Energy and Commerce.

HR 1695, Amending Section 211 of the Clean Air Act.
On May 3, 2001, Representative Richard Pombo (R-CA) introduced HR 1695, a bill to amend the Clean Air Act to prohibit the use of certain fuel additives. Like other MTBE bills, HR 1695, with only 11 cosponsors, died in the Committee on Energy and Commerce.

HR 1999, The Ethanol Energy Promotion Act of 2001.
On May 24, 2001, Representative Nussle (R-IA) introduced HR 1999 advocating the use of ethanol. HR 1999 sought to prohibit the use of MTBE and to require Federal vehicles to use ethanol fuel. HR 1999 was referred to the Committee on Energy and Commerce and the Committee on Ways and Means. It never gained any cosponsors.

State Law

Ohio SB 65
Passed
Introduced March 6, 2001 by Senator Mumper, SB 65 was signed into State law on June 18, 2002. The legislation provides liability protection for public water suppliers in Ohio from anyone alleging injury or death as a result of contaminants in drinking water when the water utility has met the requirements of the Ohio and USEPA. It also protects an acquiring water supplier against liability for any violations that existed at the time the acquiring water supplier acquired another water supplier, if the acquiring company brings the system into compliance within a time period specified by the Ohio EPA.

Trade

Amendment to HR 3009.
On May 20, 2002, Senator Jon Corzine (D-NJ) proposed an amendment to the HR 3009 trade bill. Corzine's amendment would have precluded the U.S. from agreeing to any foreign trade agreement that included a commitment to privatize certain services, including water. The amendment failed by a vote of 49-47.

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