Government Relations

Energy & Commerce Subcommittee Holds Hearing on Security

At the June 12 hearing before the Subcommittee on Environment and Hazardous Materials, Benjamin Grumbles, the Environmental Protection Agency (EPA) Assistant Administrator for Water and Colonel Robert B. Stephan, the Department of Homeland Security (DHS) Assistant Secretary for Infrastructure Protection both testified that the current exemption from chemical security regulations for wastewater treatment and drinking water facilities should be eliminated.

In his written testimony, Grumbles stated:

“The Department of Homeland Security and the Environmental Protection Agency believe that there is an important gap in the framework for regulating the security of chemicals at water and wastewater treatment facilities in the United States. The authority for regulating the chemical industry purposefully excludes from its coverage water and wastewater treatment facilities. We need to work with the Congress to close this gap in the chemical security authorities in order to secure chemicals of interest at these facilities and protect the communities they serve. Water and wastewater treatment facilities that are determined to be high-risk due to the presence of chemicals of interest should be regulated for security in a manner that is consistent with the CFATS (Chemical Facility Anti-Terrorism Standards) risk and performance-based framework while also recognizing the unique public health and environmental requirements and responsibilities of such facilities. DHS and EPA look forward to working with the committees to address this issue.”

Col. Stephan told the subcommittee that drinking and wastewater treatment facilities determined to be high risk should be regulated in a manner that is consistent with the CFATS risk- and performance-based framework.

Stephan said the department's main objective is to eliminate the current chemical security law's sunset clause and to add coverage of wastewater treatment and drinking water plants to chemical security regulations.

The subcommittee hearing was scheduled to consider H.R. 5577 and H.R. 5533.

House Homeland Security Committee approved H.R. 5577 to extend and modify federal authority to regulate U.S. chemical plant security, including requiring chemical plants to consider the use of “inherently safer technology.” The bill would also extend coverage to water treatment facilities regulated under the Safe Drinking Water Act.

H.R. 5533 would revise and extend the CFATS program, but does not include the inherently safer technology provision. Water treatment facilities would remain under U.S. EPA's jurisdiction and be exempt from DHS oversight.

Speaking on behalf of the Association of Metropolitan Water Agencies (AMWA), Brad Coffey, water treatment manager for the Metropolitan Water District of Southern California said the association opposes H.R. 5577 because it could undermine the ability of drinking water utilities to operate based on their expertise and knowledge of regional source water characteristics. Coffey also expressed AMWA’s opposition to the "inherently safer technology" provision in H.R. 5577, which he said would force community water systems across the country to replace their use of critical water disinfectant chemicals with alternative substances.

Click here, for a copy of the witness list and prepared testimony.

Solar Tax Credit; Same Road Block

For the fifth time this Congress and second time in a week, on June 17, the Senate tried and failed to move forward on a large package of tax extenders and credits. This large taxation package contains the language NAWC supports extending the solar energy tax credit to utilities.

Specifically, the Senate could not “invoke cloture” on a motion to consider the House passed H.R. 6049. Therefore, technically the Senate can’t agree to even debate the bill. Such a vote takes three-fifths of the Senate, or 60 votes. It received only 52, which while slightly better than previous votes, is still a long way from 60 votes. (It should be noted that a few Democrats missed the vote. These Senators presumably would have voted for it. However, most observers agree, supporters of H.R. 6049 are still at least four votes from getting cloture.)

The central problem is a stand-off between House Democrats, lead by moderates, which are so far insisting on passing a revenue neutral bill. Therefore the House bill, H.R. 6049, contains certain tax increases that off-set the credit extensions and other provisions. On the other side are Senate Republicans and the White House who are holding the line on any tax increases — including off-setting tax increases — and would rather see the bill “paid for” with other spending cuts or not at all.

That both the House and Senate have spent so much time on these issues is a strong sign that the leadership wants this bill passed, which is good. However, it is still unclear how it actually will be passed by Congress and signed into law, unless one side or the other blinks.

Climate Change on Ice Until 2009

As expected, the Senate was recently unable to pass the expansive “cap and trade” climate change bill, S. 3039. On June 6, the Senate was able to muster only 48 of the 60 votes needed to “invoke cloture” and move forward to considering amendments on the bill. Supporters of the bill have acknowledged that congressional consideration of the issue is over for this year, but insist it will be a priority in 2009.

As reported in the last issue of NewsFlow, S. 3039 would introduce new standards that cap greenhouse gas emissions at 19 percent by 2020 and at 71 percent by 2050. Factories, transportation, refineries, power plants and electric utilities are industries that would be subject to these standards. Emissions allowances would be available via auction for those affected by the emissions caps. Revenues from the sale of allowances would go directly to the federal government to develop programs and technology related to carbon reduction.

Representatives Testify on Financing Infrastructure Investments

Chairman Oberstar (D-Minn.) and Ranking Member Mica (R-Fla.) of the House Transportation and Infrastructure Committee held a second hearing in a series of hearings on financing infrastructure investments. The committee heard testimony on several proposed pieces of legislation from their respective congressional sponsors. Rep. Rosa DeLauro (D-Conn.) presented her idea for a National Infrastructure Development Corporation, Rep. Earl Blumenauer (D-Ore.) presented his proposal for a national commission on financing infrastructure investments and Rep. Keith Ellison (D-Minn.) presented his proposal, a counterpart to the Dodd-Hagel proposal in the Senate, to create a National Infrastructure Bank. All three proposals are being considered as part of an ongoing discussion on what to do about the state of the nation’s crumbling infrastructure.

Ranking Member Mica (R-Fla.) unveiled his goal for a national infrastructure program that would leverage $1.5 trillion: one-third of which would come from traditional federal assistance, one-third would come from creative financing, bonding and leverage financing and the other one-third would come from the increased use of Public-Private Partnerships (PPP). Mr. Mica further discussed the need to define, at the federal level, what a Public-Private Partnership entails. With this number as a funding target, Mr. Mica cautioned that the proposals being presented by Reps. DeLauro and Ellison are both too modest. Rep. DeLauro’s Development Corporation is estimated to have about $60 billion worth of financing capacity whereas Rep. Ellison’s Infrastructure Bank would be limited to issue up to $60 billion worth of debt.

The discussion on creating a national infrastructure policy is centered on transportation infrastructure but, water and wastewater infrastructure, among others, are being considered in the mix. Many in Washington are gearing up for a major infrastructure policy overhaul in the next Congress.

Mayors Testify on the Condition of the Nation’s Infrastructure

Chairman of the Senate Committee on Banking, Housing and Urban Affairs; Senator Chris Dodd (D-Conn.) heard testimony from several mayors of major metropolitan areas on the condition of the nation’s infrastructure. Mayors Bloomberg (New York, N.Y.), Franklin (Atlanta, Ga.), Peyton (Jacksonville, Fla.) and Funkhouser (Kansas City, Mo.) all expressed the need for renewed federal investment in large, long-term, regionally significant infrastructure problems. The mayors all generally favored an approach that would target limited federal resources for investment in projects based on merit, not on politics.

Senators Dodd and Hagel, Chairman and Ranking Member of the Committee, introduced S. 1926 in August 2007: a bill proposing a National Infrastructure Bank. The Bank would establish a new method through which the federal government can finance infrastructure projects of substantial regional or national significance more effectively with public and private capital. The proposed Bank within the federal government would have the authority to raise capital by issuing up to $60 billion in tax credit bonds. The bank would give loans, grants or loan guarantees to states and local governments for major infrastructure improvements.

Contentious AMT Patch Passes House Committee on Ways & Means

The House Committee on Ways and Means approved a one-year “patch” to the alternative minimum tax. The bill could be considered on the House floor by next week. However, the same issues that hindered a smooth passage of an AMT patch in 2007 are shaping up as likely impediments this year. In 2007, House Democrats conceded on a controversial “offset” provision at the 11th hour in order to ensure passage of the AMT patch.

The AMT patch would prevent 21 million — some middle class — taxpayers from paying the AMT for 2008. The tax was originally established to prevent high-income individuals from avoiding all taxes through deductions, credits and exclusions. However, its exemption amounts have never been indexed so people who were not intended to be subject to the tax may be required to pay it if another one-year patch is not passed.

House Democrats are eager to offset the lost revenue to the treasury to comply with self imposed revenue-neutral rules. The most controversial offset has been a tax on carried interest — or profit-sharing income — of private equity managers and others as ordinary income instead of lower-taxed capital gains. Offsets could not pass the Senate in 2007 and were ultimately abandoned. A similar match between House-Senate, Democrats-Republicans will likely play out this year.