House Democrats unveiled an economic stimulus package Jan. 15 that includes $8 billion to repair and upgrade the nation's aging sewer and drinking water infrastructure.

The $825 billion American Recovery and Reinvestment Act of 2009 includes funds for a wide range of infrastructure projects, including water projects, roads, bridges, energy, and transit as well as tax cuts aimed at putting people to work and pulling the nation out of the recession.

The legislation also would provide billions of dollars to develop a greener energy supply and transmission system and funding for waste cleanup at superfund and brownfield sites and at leaking underground storage tanks. (See related stories on energy and waste cleanup funding in this issue.)

Of this, $6 billion would be allocated to the Environmental Protection Agency's clean water state revolving loan fund and $2 billion to the drinking water state revolving fund for infrastructure loans.

The clean water state revolving funds provide low-interest loans to help municipalities pay for building and upgrading infrastructure needed to keep sewage, toxic chemicals, and other pollution out of lakes, rivers, streams, and coastal waters. The sate drinking water loan funds are intended to ensure that water consumed is clean and safe.

Another $1.5 billion is targeted to the U.S. Department of Agriculture's rural water and waste disposal projects.

The package also includes funds for environmental restoration and flood protection and watershed improvement programs.
House Appropriations Committee spokeswoman Kirsten Brost told BNA the committee expects to take up the bill Jan. 21.
The House passed a stimulus bill last September, but Senate efforts to pass its own stimulus bill faltered.

Bill Draws Mixed Reviews.
The legislation so far is drawing mixed reviews.

Associations representing wastewater and drinking water treatment had been pushing for $10 billion for each EPA revolving loan fund to enable what they called “shovel ready” projects to move forward.

Dan Hartnett, legislative director of the Association of Metropolitan Water Agencies (AMWA), told BNA drinking water treatment projects have been severely underfunded and the association was disappointed in the bill's allocation.

Responding to AMWA's requests, Rep. Gene Green (D-Texas), former chairman of the House Energy and Commerce Subcommittee on Environment and Hazardous Materials, sent a letter in December to House Appropriations Committee leaders recommending the $10 billion drinking water allocation.

That subcommittee has since been dissolved, and drinking water issues will now be considered by a new Energy and Commerce panel, the Energy and Environment Subcommittee, to be chaired by Rep. Edward Markey (D-Mass.).

Drinking Water Allocation Called ‘Mystery.'
Hartnett said he was baffled at how the Appropriations Committee reached this funding decision. “It's a mystery. … We're hopeful the Senate version will have a little bit more,” he said. “That $10 billion would have provided a real shot in the arm. A lot of our members have put projects on hold.”

AMWA also would have preferred that some of the included funding be in the form of grants, Hartnett said.
According to the bill summary, EPA has estimated there is a $274 billion funding gap for drinking water treatment projects. The National Governors Association had reported that there are an estimated $6 billion in ready-to-go projects, “which could be quickly obligated,” according to the bill summary.

Congress appropriated $842.16 million for the drinking water revolving fund in fiscal year 2008, a figure that has been essentially flat for the past six years.

Hartnett said AMWA's $10 billion need calculation includes large urban systems, some of which float bonds and are not included in the revolving loan fund program. The problem is that credit is tight right now, he said.

The stimulus package reflects some differences from the stimulus bill (H.R. 7110) approved by the House in September. That bill included $1 billion for the drinking water revolving fund and $6.5 billion for the clean water revolving fund (189 DEN A-11, 9/30/08).

The stimulus bill passed by the House last September included no funding for rural water and waste disposal projects, but the current bill would finance rural projects. The National Rural Water Association lobbied heavily to have them included.

Clean Water Agencies Pleased.
The National Association of Clean Water Agencies said it is pleased that the $6 billion for the clean water state revolving fund was included in the draft stimulus package.

“Congress recognizes what we have been saying all along—that the nation's aging water and wastewater infrastructure is in desperate need of resources to help our communities continue to provide strong environmental and public health protections while ensuring that we remain economically strong,” said NACWA Executive Director Ken Kirk.

“While NACWA has identified more than $17 billion in ready-to-go infrastructure projects, the $6 billion is an important step in re-establishing the critical federal, state, and local partnership needed to ensure we can continue to provide vital clean water services,” Kirk said.

NACWA cited EPA and Government Accountability Office estimates of a $300 billion to $500 billion funding gap over 20 years between what is needed to upgrade and repair the nation's wastewater infrastructure and how much is being spent.

Funding for Rural Areas.
The bill also targets $1.5 billion for U.S. Department of Agriculture grants and loans for rural water and waste disposal projects.
Mike Keegan, an analyst with the National Rural Water Association, told BNA Jan. 15 the funding amount is exactly what the association requested. “We're grateful and appreciative,” he said.

About 75 percent of these funds are grants and 25 percent are loans, mostly targeted to poor rural communities, some of which are not even served by public water supplies, Keegan said. He said $562.6 million was appropriated for these projects in fiscal year 2008.

The package also includes $4.5 billion for the U.S. Army Corps of Engineers, $500 million to the Interior Department's Bureau of Reclamation, and $400 million for watershed improvements.

Corps programs fund environmental restoration, flood protection, hydropower, and navigation infrastructure. According to the summary, the corps has a construction backlog of $61 billion.

Bureau of Reclamation funds are intended to provide clean, reliable drinking water to rural areas and to ensure adequate water supplies to western localities impacted by draught.

The bill includes $400 million for USDA's Natural Resources Conservation Service watershed improvement programs to design and build flood protection and water quality projects, repair aging dams, and purchase and restore conservation easements in river flood zones.

In addition, $224 million would be targeted for repairing flood control systems along the international segment of the Rio Grande damaged by Hurricane Katrina and other serious storms.