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Today on a 19 to 1 vote, the Senate Environment and Public Works Committee (EPW) reported out S. 2848, Water Resources Development Act of 2016 , a reauthorization package for flood control, navigation and environmental restoration projects undertaken by the Army Corps of Engineers (ACOE). In light of the drinking water crisis in Flint, MI and the on-going drought in the West, this year’s package contains several provisions related to programs within the Safe Drinking Water Act (SDWA) and the Clean Water Act (CWA), including authorizations for significant investment in water and wastewater infrastructure and provisions that address affordability challenges for communities struggling to meet obligations under the CWA.

The committee released a section-by-section summary  of the package earlier this week and this Advocacy Alert provides further analysis of provisions of particular interest for NACWA members. NACWA members with questions or interested in additional information are encouraged to contact This e-mail address is being protected from spambots. You need JavaScript enabled to view it , NACWA’s Senior Legislative Director or This e-mail address is being protected from spambots. You need JavaScript enabled to view it , NACWA’s Legislative Manager.

Many of NACWA’s legislative priorities from recent years are included in this proposed bill. And while NACWA has worked hard to advance these concepts, the true credit for securing such a landmark legislative proposal lies with the many NACWA members that have worked tirelessly over the years to inform their elected representatives about the importance of these issues. While the Senate EPW Committee’s proposal is just the first step in a much longer process towards enactment, it is an important step — and one that we all can be proud of.

Background

Congress historically reauthorizes the Water Resources Development Act (WRDA) every two years, however it struggled to maintain this schedule over the last decade as concerns regarding earmarks emerged. In 2014, Congress enacted a reauthorization package to reform the project selection process in hopes of addressing Member’s earmark concerns. If this year’s authorization effort is successful, it will help reestablish a biennial schedule for WRDA reauthorization.

During the 2014 WRDA authorization effort, Congress included several drinking water and wastewater infrastructure-related funding provisions, including significant revisions to the Clean Water State Revolving Fund (CWSRF) Program and the establishment of a new water infrastructure loan program referred to as the Water Infrastructure Financing and Innovation Act (WIFIA). The 2016 Senate bill builds on these legislative efforts and indicates that Congress is looking at WRDA as an opportunity to advance policy priorities related to municipal water and wastewater needs.

Titles I – VI: ACOE-related Sections

There are seven titles to the Senate’s WRDA 2016 package, the first six of which deal specifically with ACOE program and project related provisions. Contained within these titles are authorizations and modifications to specific projects (including feasibility studies for projects) focused on environmental restoration, navigation, and/or flood control including projects in which some NACWA members have an interest.

As some members are aware, NACWA has been advocating a proposal  to better coordinate ACOE flood control projects with local stormwater management and water reuse programs. This language was not included in the Senate bill, but NACWA is hopeful it will be included in the House version and a final conference bill – see Next Steps section below for more information.

Title VII: Safe Drinking Water and Clean Water Infrastructure

Title VII includes provisions related to the SDWA and the CWA with seven subtitles. Several provisions establish new programs within the Environmental Protection Agency (EPA) and provide reauthorizations for existing programs, new funding programs for infrastructure, and measures to address concerns over lead service lines and the drinking water crisis in Flint, MI and elsewhere.

Sense of Senate: While the package does not include an overall authorization number for the Clean Water (CW) or Drinking Water (DW) SRF programs, Title VII begins with a Sense of Senate preamble that Congress should provide robust funding for these programs and provides economic data in support of strong funding for water infrastructure. The data was developed in a recent analysis by the Water Environment Federation and the WateReuse Association. This analysis found that in addition to public health and environmental impacts, every dollar of a Federal SRF capitalization grant returns to the Treasury general fund $0.21 in the form of Federal taxes, and $0.93 in Federal taxes when additional State spending is factored in as a result of leveraging the Federal investment.

Congress has, for the past several years, provided approximately $2.5 billion combined to the two SRF programs. A decision was likely made by EPW Leadership that unless the package could contain a substantially higher authorization of appropriations than this for the SRFs, then a strong statement about the importance of funding the SRF programs would at least send a signal to appropriators to maintain those levels. Elsewhere in Title VII, language states that no further cuts to the SRF programs should be made.

Subtitle A—Drinking Water

This subtitle includes numerous provisions aimed at addressing drinking water-related concerns and preventing another lead-related crisis such as that occurring in Flint, MI. In total, the provisions contained in this subtitle authorize $1.8 billion in federal spending over five years for various drinking water-related programs. The majority ($1.4 billion) is in the form of EPA grants to aid small/disadvantaged communities, with the remainder going toward EPA grants to assist with public and private service line replacement and to support voluntary school and child care drinking water testing (Sec. 7101-7111).

Additional specific highlights include:

• Requires that EPA appoints a liaison to minority, tribal and low-income communities at each EPA regional office (Sec. 7108);
• Requires electronic reporting of lead tests, improves the notification process when lead action levels are exceeded and explicitly authorizes EPA to notify the public of drinking water test results when necessary (Sec. 7109-7110); and
• Codifies EPA’s WaterSense program, a voluntary appliance labeling program geared toward water conservation (Sec. 7112).

Subtitle B - Clean Water

Subtitle B adopts several key CWA-related policy and funding priorities for which NACWA has advocated, many of which are contained in Senator Sherrod Brown’s (D-OH) Clean Water Affordability Act (S. 2768). A number of the provisions represent the first significant reforms to the CWA in decades and an important step toward providing municipal permit holders with greater compliance flexibility to address ratepayer affordability challenges.

Highlights of this subtitle include:

• Reauthorization of the Wet Weather Grant Program, providing up to $1.8 billion to address infrastructure control programs for combined sewer overflows, sanitary sewer overflows and municipal stormwater (Sec. 7201);
• Directive to EPA to ensure that green infrastructure approaches to CWA compliance obligations are fully promoted throughout the agency and integrated within compliance programs (Sec. 7204); and,
• Requires EPA to revise the 1997 Combined Sewer Overflows—Guidance for Financial Capability Assessment and Schedule Development and prohibits the agency from using a Median Household Income (MHI) indicator as the sole indicator of affordability for residential households (Sec. 7205). In revising the Guidance, EPA must consider local economic conditions, impact on low-income customers and distressed populations, other essential community investments, among other factors. For communities already implementing CSO and SSO consent decrees, revised affordability guidance may provide an opportunity to reevaluate their financial capability. For example, many recent decrees contain general language permitting utilities to seek modification based on financial capability, circumstances, or constraints (Sec. 7205).

Sec. 7203 codifies EPA’s 2012 Integrated Planning Framework and provides significant flexibility to communities that develop integrated plans. If enacted, the EPA Administrator would be required to inform municipal dischargers (both wastewater and stormwater) of the availability Integrated Planning to aid in meeting the broad scope of CWA compliance obligations, including obligations related to wet weather and water quality-based effluent limitations.

Proposed language would also allow a discharger with an integrated plan (IP) to incorporate compliance schedules for meeting water quality-based effluent limitations beyond a single permit cycle. If enacted, this language would allow dischargers with an IP to have implementation programs for meeting water quality standards extend beyond an NPDES five year permit term. Dischargers with an existing enforcement order that undertake development of an IP can request a modification to that order based on the development of the plan. While EPA already allows compliance schedules in certain circumstances, language in the Senate WRDA proposal would codify this authority into the CWA for the first time and remove certain restrictions that EPA has historically imposed on use of compliance schedules.

In addition, Sec. 7203 establishes an Office of Municipal Ombudsman within the Office of EPA Administrator to work with municipalities as they implement compliance obligations related to environmental statutes administered by the Agency. The Ombudsman would be charged with providing technical assistance to municipalities seeking to compliance help and with providing information to the Administrator to ensure that agency policies are implemented by all EPA offices, including Regional offices. If enacted, the Office of Municipal Ombudsman could be an important voice within EPA on behalf municipal concerns.

Subtitle C – Innovative Financing and Promotion of Innovative Technologies

This subtitle contains authorizations for several funding-related programs, the most significant of which is an authorization to establish a trust fund for investments in water and wastewater infrastructure. This has been a NACWA priority for many years. The proposed trust fund would be established at the U.S. Department of Treasury and raise revenue on a voluntary basis through licensing fees paid by manufacturers of consumer products that place a label on products indicating that their purchase contributes to clean and safe water. The proposal is based on H.R. 4468, Water Infrastructure Trust Fund Act, bi-partisan legislation introduced by Congressman Earl Blumenauer earlier this year. The funds raised by the Treasury would be dedicated to the CW and DW SRF (Sec. 7303).

Sec. 7303 also contains NACWA proposed language authorizing EPA to conduct a study on the potential of establishing a subsidy program for low-income ratepayers struggling to afford water and wastewater bills and to help incentivize full-cost pricing of water and clean water services.

Additional highlights include:

• Permanent authorization of the WIFIA program and includes provisions enabling small systems to take advantage of the program (Sec. 7203);
• Authorization for $50 million per fiscal year to accelerate the development and use of innovative technologies by water systems to address pressing water challenges, reduce ratepayer costs, and improve water quality or system security. Technologies for wastewater treatment, water recycling/reuse, urban stormwater runoff, sewer or stormwater overflows, edge-of-field runoff, and more are specifically noted as eligible (Sec. 7304);
• Reauthorization of the Water Desalination Act of 1996 and provision of $48 million for five years. Prioritizes funding for research to improve existing technologies and advance next-generation desalination to reduce costs, energy, and environmental impacts; requires the White House Office of Science and Technology Policy to develop a coordinated desalination strategic plan (Sec. 7306);
• Directs EPA, in conjunction with other key Federal agencies, to develop non-regulatory national drought resilience guidelines related to drought preparedness and investments for water utilities and other entities (Sec. 7307); and,
• Contains provisions geared toward incentivizing adoption of innovated clean water technologies through the CWSRF. Also requires EPA to submit a report to Congress every five years on the barriers to adopting innovative technologies and the cost-savings potential to cities from greater use of emerging technologies (Sec. 7308).

Subtitle D – Drinking Water Disaster Relief and Infrastructure Investments

This subtitle provides the much-anticipated assistance package to address the drinking crisis in Flint, MI that was proposed by EPW Committee leadership Inhofe (R-OK) and Boxer (D-CA) and the Michigan Senators Stabenow (D-MI) and Peters (D-MI) in February. The bill only identifies Flint by name in a section requiring a GAO report regarding the Flint crisis – but other provisions including loans, loan forgiveness, and grants would provide financial assistance where a Presidential emergency declaration has been made due to lead or other contaminants in drinking water, with Flint as the obvious intended beneficiary. Key authorizations totaling $220 million aimed at Flint include:

• $100 million through the DWSRF for FY16 and FY17, to repair and replacement lead service lines. Amounts unobligated after 18 months shall be available for EPA to provide to other states (Sec. 7401);
• $70 million in WIFIA loans to provide credit subsidies, with a goal of providing secured loans totaling at least $700 million (Sec. 7401);
• $50 million to address lead prevention and exposure through the Departments of Health and Human Services and Housing and Urban Development (Sec. 7403-7404); and
• Allow additional subsidization DWSRF loans beyond the current 20% cap.

Subtitle F – Restoration

This subtitle authorizes a total of $2.24 billion for restoration efforts in three large watersheds and basins. Several NACWA members receive funding through these initiatives for non-point related work they undertake within these watershed regions. Specifically, the legislation authorizes:

• $300 million annually for five years for the Great Lakes Restoration Initiative;
• $415 million over ten years for the Lake Tahoe Restoration Initiative; and,
• $65 million annually for five years for the Long Island Sound Restoration Initiative.

Next Steps

While passage of this bill by the Senate EPW Committee is an important first step, there is still more work to be done. Most recent indications are that the full Senate plans to take up the WRDA bill in June, and NACWA will be working hard between now and then – along with support from members – to educate the full Senate on the importance of this bill.

The House has yet to introduce its WRDA bill, but it is likely to be a much more slimmed down version. Timing on the House proposal is unclear, but could occur before the end of May. NACWA will be working closely with the House to include key elements of the Senate bill and the Association’s stormwater proposal in the House bill. If the Senate and House can both pass a WRDA bill, the legislation will then head to a conference committee to iron out differences, followed by efforts to pass a conference bill by both chambers.

NACWA and its members will need to be key advocates during the upcoming legislative process. But with Sen. Inhofe and Sen. Boxer leaving leadership roles on Senate EPW at the end of this year – and thus motivated to pass a meaningful WRDA bill – and key leaders in the House of Representatives also committed to passing WRDA legislation, it is not unreasonable to think a WRDA bill could reach the President’s desk later this year. And with hard advocacy work on the part of the clean water community, there is a good chance that many of the key elements from the Senate proposal will be included in a final bill.

NACWA will continue to keep members updated as developments progress, and will inform members on how to best engage in advocacy efforts moving forward.