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NACWA is pleased to distribute this Legislative Alert, which provides an analysis and detailed overview of the water trust fund legislation, titled The Water Protection and Reinvestment Act of 2009 (H.R. 3202) . NACWA testified in support of the bill at a hearing today before the House Transportation and Infrastructure (T&I) Subcommittee on Water Resources & Environment. The legislation marks a major milestone for NACWA, its Clean Water Funding Workgroup and the Water Infrastructure Network (WIN) and demonstrates the result of its hard work over several years to develop legislation creating a Water Trust Fund, similar to those that exist for highways and airports. Due to the bold leadership of Reps. Earl Blumenauer (D-Ore.), Steve LaTourette (R-Ohio), Norm Dicks (D-Wash.), Mike Simpson (R-Idaho) and Thomas E. Petri (R-Wis.), who introduced H.R. 3202 on July 14, NACWA is a major step closer to realizing the creation of a national, dedicated Water Trust Fund.

NACWA Advocacy Efforts Help Pave Way for $60 Billion Water Trust Fund Bill

In early 2004, NACWA began to draft trust fund legislation that would create a dedicated, sustainable source of federal revenue to help the nation’s communities meet the goals of the Clean Water Act (CWA) and address a growing funding gap that the U.S. Environmental Protection Agency (EPA) had estimated to be in the hundreds of billions of dollars. NACWA also conducted a series of bipartisan national surveys through Luntz, Maslansky Strategic Research and Penn, Schoen and Berland Associates. The results demonstrated convincingly the support of Americans from coast-to-coast for a Clean Water Trust Fund – support that was greater than for existing highway and airport trust funds.

NACWA and WIN also convened a series of meetings to receive input from NACWA members, WIN organizations, and environmental, conservation and industry groups to draft consensus trust fund legislation. This draft legislation led to a pivotal hearing on June 8, 2005 to gather more information on the viability of a Clean Water Trust Fund and the eventual introduction of the Clean Water Trust Act of 2005 (H.R. 4560) by Rep. John J. Duncan (R-Tenn.), then Chairman of the House Transportation and Infrastructure Subcommittee on Water Resources and Environment. The legislation would have provided nearly $38 billion over five years. Unfortunately, Duncan’s bill stalled in the House due to concerns over Davis-Bacon prevailing wage provisions and the lack of a revenue source for the trust fund.

In the wake of the 2008 elections, NACWA and WIN shifted their advocacy efforts to focus on the House Transportation & Infrastructure (T&I) Committee. Discussions with T&I staff yielded significant results in terms of the Committee’s plans to ramp up efforts toward a clean water trust fund as part of the overall approach to bridging the clean water infrastructure funding gap. T&I Committee Chairman James Oberstar (D-Minn.), Subcommittee on Water Resources & Environment Chair Eddie Bernice Johnson (D-Texas), and Blumenauer agreed to send a request to the Government Accountability Office (GAO) for a study to evaluate viable revenue sources for a clean water trust fund, a critical step toward introducing trust fund legislation. Staff with Rep. Blumenauer’s office also indicated their intent to use the NACWA/WIN 2005 proposed trust fund legislation, which also served as the basis for Duncan’s trust fund legislation that was introduced in the 109th Congress, to create a draft trust fund bill while waiting for the results of the GAO report.

NACWA and WIN then participated in a series of discussions hosted by Oberstar and Blumenauer to develop a strategy for moving clean water trust fund legislation. Blumenauer distributed an outline  and discussed several discussion drafts with NACWA, while embarking on a significant outreach effort to generate support amongst policymakers in Congress and around the Country. NACWA also worked through its Communications and Public Relations Committee on public education and outreach efforts that would support member agency initiatives to focus attention on this issue – and with other WIN organizations, such as Food and Water Watch, in support of their grassroots organizing on behalf of a trust fund.

The GAO released its 50 page report, CLEAN WATER INFRASTRUCTURE: A Variety of Issues Need to Be Considered When Designing a Clean Water Trust Fund  on June 29. The report provides an impartial analysis of possible revenue sources to support a $10 billion per year trust fund. NACWA released a detailed analysis July 1 of the report in its Legislative Alert 09-15. NACWA met with GAO officials as they were researching the report, and provided information analyzing the possible revenue sources for a clean water trust fund that the GAO was looking at. These sources included fees on bottled beverages, “flushables,” pesticides and fertilizers, pharmaceuticals, a permit fee on industrial dischargers of certain toxic chemical pollutants, and a clean water restoration fee similar to what is available as part of the superfund program. NACWA issued a press release when the report came out expressing appreciation to the members of Congress for requesting it, and pointing out why a trust fund is so important to the clean water community. Following up on the release of the report, Reps. Blumenauer, LaTourette, Dicks, Simpson and Petri introduced H.R. 3202.

Overview of the Water Protection and Reinvestment Act of 2009

H.R. 3202 incorporates nearly all of the programs contained in the WIN draft trust fund legislation. Most significantly, the Water Protection and Reinvestment Act of 2009 establishes a federal Water Trust Fund that would provide more than $12 billion annually from fiscal year (FY) 2010 through FY 2014, or total funding of nearly $60 billion, to local communities to address drinking water and wastewater infrastructure needs. The trust fund dollars will be firewalled and structured like the Highway Trust Fund. Funding will be generated through the imposition of four new taxes/fees that are outlined in Section 101 of the legislation. These include:

1.Water Based Beverages Fee: Glass, cans, plastic and other containers of water based beverages, defined as those drinks that are water or are manufactured with water as a significant input, that are five gallons in size or less would be taxed at a rate of four cents per container sold by the manufacturer. This is estimated to raise about $8 billion a year.

2.Product Disposal Fee: This category includes products that are normally flushed and disposed of in sewer systems and includes soaps and detergents, toiletries, toilet tissue, water softeners, and cooking oils. A 3% tax would be levied on the wholesale price of any product sold, generating $2.2 billion annually.

3.Pharmaceuticals Fee: A tax of 0.5% of the wholesale price of any pharmaceutical product sold by manufacturers or importers to raise approximately $780 million.

4.Clean Water Restoration Tax: A tax of .15% would be levied on the incomes of corporations with profits of over $4 million a year. This would be similar to the Corporate Environmental Income Tax (CEIT) that provided funding for the Superfund program and would generate approximately $1.7 billion.

While the taxing provisions of the bill could generate significant opposition, Blumenauer has consistently stated that they are justified by the great need to upgrade our water infrastructure. NACWA and WIN members will continue to work with Blumenauer and his staff to educate the public, members of Congress, and the industry sectors that would be asked to pay for the trust fund about the critical importance of a federal commitment to clean water.

H.R. 3202 ensures the viability of the drinking water and clean water state revolving funds (SRFs) by providing almost $5 billion to the CWSRF and $3.5 billion to the DWSRF (Section 102). Significantly, states would be required to allocate 50 percent of the CWSRF funds in the form of grants rather than loans (Section 206). In addition to developing a priority list for traditional CWSRF loans, states would also be required to develop a prioritized list of projects for which it will provide grants. The priority for the use of grant funds will be given to projects that 1) address the most serious water pollution problems, 2) benefit communities with the greatest need, or 3) incorporate nonstructural or decentralized treatment practices. The cost-share for projects receiving grant funding will be 50 percent, meaning that the treatment facility is responsible for 50 percent of the funding. This section of the bill also provides $180 million for grants under Section 106 of the CWA (an existing program that provides grants to States and to interstate agencies to assist them in administering SRF programs), $300 million for grants under Section 319 of the CWA (an existing grant program for states to implement nonpoint source management programs), and $120 million for technical assistance for rural small treatment works and public water systems.

Sections 203 – 205 of H.R. 3202 make a number of changes to the CWSRF program. Sections 203 and 204 ensure that any engineering and design services awarded by the Trust Fund will be done in an open competition consistent with the Brooks Act, ensure that the trust fund is subject to Davis-Bacon prevailing wage laws, and provide that no money will be used to subsidize new development but is instead dedicated to rehabilitating and repairing existing infrastructure. Section 205 expands the type of projects that are eligible for funding, provides for an extended repayment period for SRF loans, requires that any recipient of a loan must develop and implement a fiscal sustainability plan, increases the amount of money that states can use for administrative expenses, and allows states to provide additional subsidization to projects that benefit low income areas or that implement an “innovative or alternative process, material, technique, or technology that may result in greater environmental benefits or equivalent environmental benefits at a reduced cost.” Finally, Section 205 requires a state to establish affordability criteria to assist in identifying municipalities that should qualify for additional subsidization and provides that additional subsidization provided by a state may not exceed 30% of the total amount the state receives (not including high priority grants).

Title III of H.R. 3202 focuses on DWSRF. It provides $3.5 billion over five years and amends the Safe Drinking Water Act to specifically authorize states to spend money on existing infrastructure for: 1) planning, design, and associated preconstruction activities; 2) replacement or rehabilitation of aging treatment, storage, or distribution facilities; 3) capital projects to upgrade or enhance the security of public water systems; 4) consolidation of management functions with other public water systems; 5) increasing the energy or water efficiency of the water system; or 6) onsite projects to generate renewable energy. H.R. 3202 also requires that one-third of the funding provided to states under Title III shall be used for infrastructure improvement projects in systems serving populations of 100,000 or more. In determining project priorities for spending SRF dollars, the states are required to give greater weight to project applications that ensure fiscal and environmental sustainability. This section also expands affordability criteria to include bigger systems with pockets of low income areas and requires EPA to consider the needs of eligible water systems of all sizes in its capital needs survey. Finally, the bill provides $60 million for technical assistance to small public water systems.

Title IV creates a number of new grant programs at EPA to help upgrade drinking water and clean water infrastructure. An additional $60 million in grant funding is also targeted for security enhancements; $120 million is provided for climate change and adaptation, $24 million is provided for training programs and scholarships for personnel and operators of treatment works and water systems; $600 million is provided for sewer overflow control grants; $600 million is provided for research and development, regional water research centers, and a cost of service study; and $36 million is provided for a new drug take back program. Again, the cost-share for projects receiving grant funding will be 50 percent.

NACWA Urges Support For Water Trust Fund in July 15 Testimony

Subsequent to the introduction of H.R. 3202, NACWA was asked to testify at today’s hearing before the House T&I Subcommittee on Water Resources and Environment about GAO’s findings and the trust fund bill introduced July 14 by Blumenauer. Tom Walsh, engineer-director of the Upper Blackstone Water Pollution Abatement District, a NACWA member agency in Massachusetts testified for the association.

In his testimony , Walsh argued that, “a clean water trust fund is critical to ensuring communities can continue to meet their Clean Water Act obligations.” Walsh stressed that municipalities are willing to pay their share and will continue to do so. However, he urged those on the committee to do more to address the shortfall facing our nation’s publicly owned wastewater treatment agencies and asked the question, “If highways merit a trust fund with $30 billion per year, and airports $10 billion per year, why should we not have one for water, a resource each of us uses every single day?” NACWA will continue to work with its allies to generate support for the trust fund legislation and will keep members informed of progress as this important effort moves forward.

NACWA Member Involvement . . . Next Steps

NACWA will need your continued support and advocacy efforts to move forward with H.R. 3202. As such, NACWA encourages its members to distribute copies of the bill and supporting materials contained in this Legislative Alert to local, state and federal officials, as well as to local and state stakeholder groups. It is critical that as broad an array of groups and individuals learn about, and lend their support to, this effort.

NACWA members are encouraged to meet with their congressional delegations and staff in their District and State offices to explain the importance of this legislation to the future integrity of the nation’s wastewater infrastructure. An effort is now underway by NACWA and other supporting organizations to recruit Representatives as cosponsors of the bipartisan bill and to advocate for similar legislation in the Senate.

In the coming weeks, NACWA will also make available to member utilities an array of educational materials to be used at the local level to generate support for the bill on its Clean Water Funding Network website, www.cleanwaterfunding.org. These materials will include sample letters to be sent to your State’s Representatives, press kits, and other outreach tools. If you have questions about the Water Protection and Reinvestment Act of 2009, please contact NACWA’s Pat Sinicropi at (202) 833-4655 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it or Byron DeLuke at (202) 833-4655 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .