Clean water funding : hearing before the Subcommittee on Environment and Natural Resources of the Committee on Merchant Marine and Fisheries, House of Representatives, One Hundred Third Congress, first session, on achieving the objectives of the Clean Wat

230 Pages·1993·7.4 MB·English

by  United States. Congress. House. Committee on Merchant Marine and Fisheries. Subcommittee on Environment and Natural Resources

CLEAN WATER FUNDING
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Y 4, M 53; 103-1 ^^^q
Clean Hater Fundinqi Serial No. 103
N ENVIRONMENT
AND NATURAL RESOURCES
OF THE
COMMITTEE ON
MERCHANT MARINE AND FISHERIES
HOUSE OF REPRESENTATFOIS
ONE HUNDRED THIRD CONGRESS
FIRST SESSION
ON
ACHIEVING THE OBJECTIVES OF THE CLEAN WATER
ACT
FEBRUARY 18. 1993
Serial No. 103-1
Printed for the use of the Committee on Merchant Marine and Fisheries
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ISBN 0-16-040928-4

CLEAN WATER FUNDING
Y 4, H 53: 103-1 ^^^q
THE
Clean Hater Funding/ Serial Ho. 103 •*
N ENVIRONMENT
AND NATURAL RESOURCES
OF THE
COMMITTEE ON
MERCHANT MAKINE AND FISHERIES
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRD CONGRESS
FIRST SESSION
ON
ACHIEVING THE OBJECTIVES OF THE CLEAN WATER
ACT
FEBRUARY 18, 1993
Serial No. 103-1
Printed for the use of the Committee on Merchant Marine and Fisheries
JH¥
'"^2
3 1993
U.S. GOVERNMENT PRINTING OFFICE
67-9H.J-. WASHINGTON : 1993
ForsalebytheU.S.GovernmentPrintingOffice
SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402
ISBN 0-16-040928-4
COMMITTEE ON MERCHANT MARINE AND HSHERIES
GERRY E. STUDDS. Massachusetts. Chairman
WILLIAM J. HUGHES. New Jersey JACK nELDS. Texas
EARL HUTTO, Florida DON YOUNG. Alaska
WJ. (BILLYl TAUZIN. Louisiana HERBERT H BATEMAN. Virginia
WILLIAM O. LIPINSKI. Illinois JIM SAXTON. New Jersey
SOLOMON P ORTIZ, Texas HOWARD COBLE. North Carolina
THOMAS J MANTON. New York CURT WELDON. Pennsylvania
OWEN B. PICKETT. Virginia JAMES M. INHOFE. Oklahoma
GEORGE J. HOCHBRUECKNER. New York ARTHUR RAVENEL. Jr.. South Carolina
FRANK PALLONE. Jr.. New Jersey WAYNE T. GILCHREST. Maryland
GREG LAUGHLIN. Texas RANDY "DUKE* CUNNINGHAM. California
JOLENE UNSOELD. Washington JACK KINGSTON. Georgia
GENE TAYLOR. Mississippi TILLIE K. FOWLER. Florida
JACK REED. Rhode Island MICHAEL N. CASTLE. Delaware
H. MARTIN LANCASTER. North Carolina PETER T. KING. New York
THOMAS H. ANDREWS. Maine LINCOLN DIAZ^BALART. Florida
ELIZABETH FURSE. Oregon RICHARD W. POMBO. California
LYNN SCHENK. California
GENE GREEN. Texas
ALCEE L. HASTINGS. Florida
DAN HAMBURG. California
BLANCHE M. LAMBERT, Arkansas
ANNA G. ESHOO. California
THOMAS J BARLOW. III. Kentucky
BART STUPAK, Michigan
MARIA CANTWELL, Washington
PETER DEUTSCH, Florida
GARY L. ACKERMAN. New York
JepfreyWR. Pike, StaffDirector
WiixiAM SrELLE, ChiefCounsel
Mary J. Fusco Krreos. ChiefClerk
Harry F. Burroughs, MinorityStaffDirector
Subcommittee on Environment and Natural Resources
GERRY E. STUDDS, Massachusetts, Chairman
GEORGE J. HOCHBRUECKNER, New York JIM SAXTON. New Jersey
FRANK PALLONE. Jr.. New Jersey DON YOUNG. Alaska
GREG LAUGHLIN. Texas CURT WELDON. Pennsylvania
JOLENE UNSOELD. Washington ARTHUR RAVENEL. Jr.. South Carolina
JACK REED. Rhode Island WAYNE T. GILCHREST. Maryland
EDLAINZAHBAEMTBHURFUGR.SEC.aliOfroergnioan ; RMIACNHDAYEL"DNU.KCEA"STCLUEN,NDIeNlGawHaArMe. California
BLANCHE M LAMBERT. Arkansas JACK FIELDS. Texas (ExOflicioi
ANNA G. ESHOO. California
EARL HUTTO. Florida
W.J. (BILLY) TAUZIN. Louisiana
SOLOMON P ORTIZ. Texas
Dan Ashe, StaffDirector
Lesue Grey. ProfessionalStaff
Laurel Bryant, Minority ProfessionalStaff
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CONTENTS
Page
Hearing held February 18. 1993 1
Statement of:
American Forest and Paper Association (Prepared statement) 121
Cunningham, Hon. Duke, a U.S. Representative from California 8
Dorfman, Gerry, President, National UtilitiesContractors Association 18
Prepared statement 85
Fields, Hon. Jack, a U.S Representative from Texas 4
Furse, Hon. Elizabeth, a U.S. Representative from Oregon 5
Gilchrest, Hon. Wayne, a U.S. Representative from Maryland 6
Hamburg, Hon. Dan, a U.S. Representative from California 6
Prepared statement 7
Hart, Dennis. Administrator for Environmental Regulation, New Jersey
Department ofEnvironmental Protection and Energy 15
Prepared statement 73
Hooker, Michael, President, University ofMassachusetts (Prepared state-
ment) 181
Margerum, Sonya, Mayor, West Lafayette, Indiana, and vice chair. Na-
tional League ofCities EENR Committee 11
Prepared statement 48
Myers, Gary D., President, The Fertilizer Institute(Prepared statement)... 142
National Council ofFarmerCooperatives(Prepared statement) 129
Ostler, Don, President, Association of State and Interstate Water Pollu-
tion Control Administration 13
Prepared statement 53
Saxton, Hon. H. James, a U.S. Representative from NewJersey 4
Sheets,James A.. Mayor, city ofQuincy, Massachusetts 9
Spencer, John. Director, Water Pollution Control, Department for the
Seattle Metropolitan Area. Association ofMetropolitan Sewerage Agen-
cies 16
Prepared statement 76
Studds. Hon. Gerry E.. a U.S. Representative from Massachussetts 1
Prepared statement 2
Additional material supplied:
Association of Metropolitan Sewerage Agencies: A National Survey of
Municipal Wastewater Management Needs 189
National Utility Contractors Association: Report entitled, "A Report on
Clean Water InvestmentandJobCreation" 194
Communicationssubmitted:
Sanders, Edward G. and Beauchamp. Martha A. (Sanders International):
LetterofFebruary 23, 1993, toCongressman Gerry E. Studds 218
Subcommittee staff: Memorandum of February 12, 1993, to Members of
Subcommitteeon Clean Water Funding 39
(m)

CLEAN WATER FUNDING
THURSDAY, FEBRUARY 18, 1993
House of Representatives, Subcommittee on Environ-
ment AND Natural Resources, Committee on Mer-
chant Marine and Fisheries,
Washington, DC.
The subcommittee met, pursuant to call, at 10:10 a.m., in room
1334, Longworth House Office Building, Hon. Gerry Studds [chair-
man ofthe subcommittee] presiding.
Present: Representatives Studds, Pallone, Unsoeld, Reed, Furse,
Hamburg, Lambert, Saxton, Ravenel, Gilchrest, Cunningham,
Castle.
Staff Present: Leslie Grey, Will Stelle, Dan Ashe, Barbara
Jeanne Polo, Sue Waldron, Gina DeFerrari, Marv Zeeb, Mary
Kitsos, Robert Wharton, Cynthia Wilkinson, Lori Rosa, Jayneanne
Rex, Laurel Bryant, Tom Melius, Judy Alvarez, Margherita Woods,
Bill Wright.
STATEMENT OF HON. GERRY STUDDS, A U.S. REPRESENTATIVE
FROM MASSACHUSETTS, AND CHAIRMAN. SUBCOMMITTEE ON
ENVIRONMENT AND NATURAL RESOURCES
Mr. Studds. The subcommittee will come to order. We meet this
morning to consider what is very aptly described as a crisis in
clean water funding. As I am sure the witnesses will illustrate, our
country today is about as far from achieving the objectives of the
Federal Clean Water Act as we have ever been, and the reason,
very simply put, is that we do not have the money to do the job.
Increasing our commitment to fund clean water infrastructure is
the most important clean water issue facing the country. We can
talk about controlling combined sewer overflows, polluted runoff,
storm water, and toxics, but we will be simply talking unless we
find the money to do the job. Our cities and towns and our individ-
ual ratepayers cannot shoulder this burden alone.
There is also the larger issue of affordable water and sewer serv-
ices. Simply put, it is an issue that cuts to the core ofwhat prosper-
ity and economic development mean to municipal and family cof-
fers across the nation. In my own district, which, unfortunately, is
as telling an example of this as any, this year will mark the 8th
anniversary of the Court-ordered Boston Harbor cleanup. I daresay
there will not be any parades or celebrations to mark the occasion.
In the city of Quincy, from whose mayor we will hear in a
moment, sewer and water rates have risen by more than 400 per-
cent in the interim, and they are projected to double very shortly
again. It now costs more to run the tap than it does to educate
(1)
your child or to keep the streets safe. We have one of the highest
rates in the nation, and, as I said, they are about to double again.
What about economic development? The average industrial
water and sewer bill in our region is $694,000 per year. In other
cities, which, for obvious reasons, I will not name at the moment, it
is about a sixth ofthat. Ifyou are going to start up a business, you
have to be particularly attracted by the other advantages ofa loca-
tion to move in our direction. Affordable water and sewer services
cut to the core ofour prosperity; they are not a luxury.
We must face two unpleasant facts. The first is that the last 12
years have witnessed the essential bankrupting ofthe Federal Gov-
ernment, and the nation's cupboard is bare. We now have a Presi-
dent who told us he intended to do something about it, and I think
we now know that he is very serious indeed. The second fact is that
we must increase Federal funding for water services. The current
situation is unacceptable, and it is getting rapidly worse.
These two stark realities led me three years ago to bring an
effort to find new money for clean water because the only way we
will increase Federal support is to identify a way and most likely a
new way to pay for it. Hence, our proposal for an alternative fi-
nancing mechanism that is founded on the polluter-pays principle
which would generate some $6 billion annually through a broadly
based system oftaxes on polluting industries and activities. No one
wants to be taxed, and no one particularly wants to talk about this
issue. There is, however, no alternative whatsoever other than
living with highly polluted water, and that is no alternative.
It is time to face the facts and to get to work in solving an ex-
traordinarily complex problem. I hope today's hearing will help us
in that regard. Before going to our witnesses, I will recognize mem-
bers if they wish, reminding them of them of the new rules of the
committee which are hortatory in nature and which discourage the
kind of statements I just gave. I think they except the Chair and
the ranking member, however.
[Statement ofMr. Studds follows:]
StatementofHon. Gerry E. Studds, a U.S. Representativefrom Massachusetts.
ANDChairman,Subcommitteeon Environmentand NaturalResources
The Clinton infrastructure initiative presents an unprecedented opportunity to
create millions ofjobs, improve water services that are essential for long-term eco-
nomic growth, and make huge improvements in environmental quality nationwide.
THEPROBLEM
Nationwide, water and sewer bills are skyrocketing, as the costs of municipal
sewage plants soar. The Reagan/Bush policy of withdrawing Federal support for
clean water is bankrupting household and municipal budgets. Consider these facts.
We have underinvested in clean water infrastructure. TTie Environmental Protec-
tion Agency (EPA) estimates that it will cost $111.5 billion over the next 20years to
build the infrastructure needed to comply with current Federal standards for
wastewatertreatment alone.
At current rates of investment, we are falling further and further behind every
year. A recent report issued by the National Utility Contractors Association found
that the annual shortfall in Federal, state and local funding for wastewater infra-
structure isas high as $7.7 billion.
Ifthe conviction is there, thejobsarethere. In February 1992, the EPAestimated
that there are $12 billion in wastewater infrastructure projects which are "ready to
go". Morecurrentestimatesare nowbeing prepared.
Drinking water requirements are also draining local coffers. "Ready-to-go" drink-
ingwater projectstop$14 billion—exceedingwastewater requirements.
THESOLUTION
A FEDERAL INVESTMENTOF $6 BILUON ANNUALLY IN PROTECTING WATERQUAUTY
TREATMENT IS REQUIRED
Theclean water infrastructure initiative should pursue twotrackssinriultaneously
to achieve this objective. First, it should have an immediate appropriation tojump-
start the clean water and drinking water program forjobs and productivity. Second,
itshould phase in a permanent solution totheclean water fundingcrisis.
THESHORTTERM
The first year infrastructure proposal should serve as a br—idge to the long-term
solution by appropriating $3.5 billion for clean water projects making a total 1993
investmentof$6billion.
THE LONG TERM
Accompanying the short-term stimulus package should be a long-term solution
that phases in a self-financing mechanism and phases down the appropriation levels
fordeficit reduction purposes.
The long-term solution iscomprised oftwocoreelements:
A "polluter pay" proposal to raise new revenues; and
A substantial retooling of the existing state revolving fund system to encompass
drinking water requirements and improve the SRF's ability to finance state and
local clean water programs.
The heartofthe proposal isthe "Polluter Pays" principle, shiftingagreatershare
of water treatment costs away from town and household coffers and onto the
sources of pollution. At my request, the Congressional Research Service (CRS) has
issued a detailed reporton this major new source ofclean water funding. Through a
combination of revenue sources, this proposal would provide a large infusion ofdol-
lars intoexistingstate revolving funds(SRF's) to finance state and local clean water
projects.
REVENUES
—
A fee on the industrial discharge of toxic pollution expected revenue: $3.0 bil-
lion.
A fee on industrial, com—mercial, and consumer products that are known to con-
tribute towater pollution expected revenue: $2.0 billion. —
An excise tax on the active ingredients ofpesticides and fertilizers expected rev-
enue: $1.0billion.
Total Annual Revenues: $6.0 billion
DISBURSEMENTS
TheNationalClean WaterInvestment Corporation
Several principles should govern disbursements. Revenue should be dispersed
through a National Clean Water Investment Corporation and channeled to state re-
volving loan funds(SRF's)that would be retooled to reflect the following:
Project Eligibilities. Project eligibilities would be expanded beyond sewer projects
to include a broader array ofclean water needs, including combined seweroverflow,
stormwater controls, other capital costs associated with implementing state non-
point source control programs, local drinking water requirements and other state
flriu locAi (?l^&fi wst^f* n^^CiS
Broader FinancingTools. The State Revolving Funds(SRF's) must be revamped to
authorize a broader array offinancing tools, like zero and negative interest loans to
helpsmall and financially strapped communities(a negative interest loan is another
form for a direct grant insofar as it buys down the outstanding principle ofa loan);
Revise the Allocation Formula. The current Clean Water Act allocation formula
must be revised to reflect actual state needs.
THE RETURN ON INVESTMENT
Jobs for the Environment. The National Utility Contractors Association estimates
that every $1 billion investment in water and sewer projects generates from 34,200
to 57,400 injobs for American workers. Therefore, EPA's total 20-year need estimate
represents as many as 6,402,060 American jobs. More importantly, the EPA esti-
mate that there are $12 billion in projects—"ready togo" (completed design and engi-
neering phases and ready to go to bid) meaning that a short-term initiative in
clean water investment will generate as many as 614,180 American jobs over the
nextsix years.
LongTerm Productivity Increases. Job creation isthe most rapid andobviousben-
efit but this investment pays other dividends as well. A cleaner environment pro-
motes health and safety and contributes to employee productivity; public invest-
ment in water treatment capacity isa demonstrated stimulus to private investment;
a national polluter pays feesystem will promotecompetitiveness by eveningtheeco-
nomic playing field between statesand citiesand create market incentives for pollu-
tion reduction and innovativetechnologies.
The result is productivity, competitiveness, economic stimulus,jobs, and a cleaner
environment.
Mr. Studds. Are there opening statements on this side? The gen-
tleman from South Carolina.
Mr. Ravenel. Mr. Chairman, I have no opening statement, but I
have a statement here by Mr. Fields from Texas which I would like
to enter into the record.
Mr. Studds. Without objection.
[Statement ofMr. Fields follows:]
StatementofHon. Jack Fields, a U.S. Representative from Texas, and
Ranking Minority Member,Committeeon MerchantMarine and Fisheries
Mr. Chairman, it is a pleasure today tojoin you as theSubcommittee on Environ-
ment and Natural Resourcesconsiders national needs for fundingclean water infra-
structure projects.
Mr. Chairman, in my opinion, considerable progress has been made over the past
two decades in meeting the ambitious and highly laudable goals set out in the Fed-
eral Clean Water Act and the Safe Drinking Water Act. Progress is notjeopardized
by a lack of public concern for environmental or health issues; rather, lack of
progress is due to a severe shortage of funds for the construction of clean water
projectsacrossourcountry.
The hearing today will provide an opportunity to receive testimony from the En-
vironmental Protection Agency, State water pollution control administrators, and
representatives of water utilities, to identify long-term national needs for clean
water financing. This need can be translated into billions of dollars in capital in-
vestment. This investment iscrucial tothe protection ofenvironment, fisheries, and
wildlife. It isalso necessary tosupportagrowingand sustainableeconomy.
I look forward to the testimony that we will receive today for it will help assess
the need for more Federal funding and explore ways to generate additional dollars
to meetthose needs.
Thank you, Mr. Chairman.
Mr. Ravenel. Also one by Mr. Saxton. I would like to say on
behalf of Mr. Saxton that he will be here a little later, that he
wanted me to welcome Mr. Dennis Hart of the New Jersey Depart-
ment of Environmental Protection and Energy. Thanks for coming
today, and we look forward to your testimony. Thank you, Mr.
Chairman.
Mr. Studds. Thank you, sir.
[Statement ofMr. Saxton follows:]
StatementofHon. H. JamesSaxton, a U.S. Representative from NewJersey
I would like to welcome Mr. Dennis Hart ofthe New Jersey Department ofEnvi-
ronmental Protection and Energy. Thank you for coming today. I look forward to