House Transportation and Infrastructure Committee Issues Testimony by NRDC
"Good morning Chairman Graves, Ranking Member Napolitano, and members of the Subcommittee. I am
"Summary of Testimony
"In my testimony today, I will emphasize the critical need for major, new federal investment in water, wastewater, and stormwater infrastructure, in order to protect human health and the environment. In much of the country, our aging infrastructure is simply not up to the twin tasks of providing everyone with access to the safe water and sewer services they need and keeping our waterways free of harmful pollution. The scale of the need is so vast that, without a large and lasting commitment of new funds from the federal government - leveraged with additional funds from the states - our communities will not be able to fund the investment they so badly need to bring their water systems into the 21st Century.
"Specifically, NRDC offers the following top recommendations:
"* Increase the current annual appropriations to the Clean Water and Drinking Water State Revolving Funds (the SRFs) to
"Direct the additional funds to water efficiency, green infrastructure, hardship communities, source water protection, nutrient reduction, lead service line replacement, water loss control, and climate resilience.
"* Provide incentives to states to leverage federal funds and invest more state dollars in water infrastructure, by allowing states that exceed the minimum required match for federal SRF capitalization grants to distribute a larger share of their SRF funding as grants, rather than loans.
"* Reauthorize and improve the sewer overflow control grant program under Clean Water Act Section 122.
"* Improve implementation of existing requirements, enacted in 2014, that promote the use of water efficiency, recapture, and reuse strategies in CWSRF-funded projects.
"* Ensure that water and sewer service remains affordable for low-income households, even as utilities generate additional local revenue to meet clean water needs.
"* Prioritize disadvantaged communities in water infrastructure grant programs.
"* Create a federal low-income water and sewer assistance program (analogous to the
"* Use federal policy to spur creation of complementary state and local customer assistance programs; promote more equitable water and sewer rate structures; and increase utilities' use of asset management, green infrastructure, and water efficiency strategies that reduce costs for all customers.
"* Reinstate the Federal Flood Risk Management Standard, to protect the value of federal water infrastructure investments by reducing the risk of severe damage in future flood disasters.
"* Support tools for effective prioritization of pipe replacement and leakage control.
"* Preserve and strengthen source water protections, including the Clean Water Rule, to protect health and reduce treatment costs.
"Finally, NRDC urges
"Federal Infrastructure Funding, Including Water Infrastructure Funding, Should Be Guided by Principles that Maximize the Benefits of
"As the
"* Use public funds in ways that simultaneously deliver economic, social, and environmental benefits;
"* Spur innovation in clean and efficient water and energy systems;
"* Invest in climate-resilient infrastructure projects and smart technology;
"* Ensure accountability for every dollar, including robust public input and review through compliance with the National Environmental Policy Act requirements;
"* Allocate flexible funding for local and regional planning; and
"* Create good, forward-looking jobs, beyond the construction phase of infrastructure projects.1
"For water, wastewater, and stormwater infrastructure, specifically, we also urge
"Further, water infrastructure investments must ensure communities and families in the greatest need are not left behind. Federal funds should assist communities facing large gaps between their infrastructure needs and their ability to raise or repay funds from local sources. Federal funds and policies should also support customer assistance programs and equitable rate structures that help maintain affordable water and sewer costs for low-income households. In addition, we can amplify benefits to the economy by incorporating Buy American domestic sourcing requirements, and prevailing wage provisions, and green job opportunities.
"Finally, increased funding should not support extending service in ways that facilitate sprawl development. It should not come at the expense of reductions in federal funding for other environmental investments or regulatory programs. Nor should this funding be linked to reduced environmental protections under the Clean Water Act, Safe Drinking Water Act, Endangered Species Act, National Environmental Policy Act, and other statutes.
"
First-class infrastructure to protect clean water and public health is among our most important - and most basic - needs as a nation. Across the country, America's municipal wastewater and stormwater infrastructure is outdated and failing due to decades of deferred maintenance and a failure to implement up-to-date pollution control technologies. Far too often, all across the country, untreated or insufficiently treated sewage and polluted runoff from cities and suburbs makes our rivers, bays, beaches, estuaries, and other inland and coastal waters both unsafe for human use and too degraded to support the fisheries and natural habitat on which we all depend for sustenance, recreation, and natural flood mitigation. Water quality in and downstream of urbanized areas is too degraded to meet water quality standards established under the Clean Water Act to protect drinkable, fishable, and swimmable waters.
"Likewise, in regard to drinking water infrastructure, although many utilities have substantially improved treatment in recent years, our failure to invest adequately in water infrastructure means that, in too many cases, the public is still drinking water containing contaminants that pose serious health risks.2 We remain at risk from lead, arsenic, bacteria and other pathogens, cancer-causing disinfection byproducts, the rocket fuel component perchlorate, and many other regulated and unregulated contaminants. One very visible manifestation of failing drinking water infrastructure is the estimated 240,000 water main breaks per year.3 Even more water is lost to unseen leaks and breaks that never reach the surface. This not only wastes enormous amounts of precious water and causes serious damage to roads and property, it also can pose significant public health risks. Particularly when water mains are close in proximity to sewer lines, fecal contamination can get into the drinking water after a rupture or pressure loss, posing a threat of causing a waterborne disease outbreak. Drinking water treatment plants, too, suffer from outdated infrastructure. Far too many continue to rely solely upon outdated treatment technologies such as coagulation, sand filtration, and chlorination. These can work well to remove some basic contaminants, like certain microorganisms, but cannot remove many of the modern contaminants, such as pesticides, industrial chemicals, pharmaceuticals, and other chemicals that are widespread in water.4 Further, there are an estimated 6-10 million lead service lines in the
"Based on data from the states, which was self-reported in 2011-2012 by local governments and utilities responding to a voluntary survey, the
"These numbers also do not include the cost of additional improvements needed to make the nation's drinking water, wastewater and stormwater systems more resilient to the challenges posed by climate change. The national associations representing wastewater and drinking water utilities estimate that impacts of climate change could add between
"An increasing risk of flooding, especially in coastal areas, is extremely problematic, as water and sewage treatment plants often are built in low-lying areas, close to a water supply source or a receiving water for treated effluent. Between 1998 and 2014, the
Hurricane Harvey impacted multiple drinking water systems, resulting in 166 declaring boil-water notices and 50 shutting down.13 In
"Despite the staggering need to improve our water infrastructure, aggregate capital spending at the local, state, and federal level is currently just
"Moreover, as the need for investment has grown, the share of federal contribution to water infrastructure spending has fallen significantly over the past 30 years.16
"We must increase federal water infrastructure investment now to address this enormous outstanding need. This will yield both environmental and economic benefits for our communities. It is estimated that
"We cannot meet our most basic water infrastructure needs without a huge increase in direct public investment by the federal and state governments. Private investment can play, at most, only a modest role in solving these problems. Private investors require a return on their investment, which, in the case of water, wastewater, and stormwater infrastructure, is derived from rate revenues. Yet, in many places across the nation, the scale of investment needed to fully solve water infrastructure problems is greater than local ratepayers can support alone. A federal infrastructure policy that relies principally on private investment would simply fail to meet our nation's massive water infrastructure needs, particularly in rural states and poor communities.
"For example, of the 53,000 community drinking water systems in
"Congress Should Triple the Size and Improve the Deployment of State Revolving Fund Appropriations, Reestablish a
"The federal government provides critical support to help communities meet their water infrastructure needs through the Clean Water and Drinking Water State Revolving Funds (hereafter "CWSRF" and "DWSRF," or collectively "the SRFs"). Since their inception, the SRFs have provided
"Both increased SRF and related water infrastructure funding and better deployment by states of available funds are necessary to meet our water infrastructure investment needs. NRDC recommends a major increase in annual SRF appropriations, with a priority on providing more financial support to meet low-income communities' water infrastructure needs, increasing investments in environmentally innovative projects, and preparing our water systems for the uncertainties of operating in a future defined by the impacts of climate change. We recommend changes in federal SRF rules that would spur states and communities to take advantage of the full range of financial assistance that the SRFs are able to provide. We also support proposals to reauthorize the sewer overflow control grant program, which would complement the SRF. And we recommend more effective implementation of SRF policies that
"Congress Should Increase SRF Funding and Establish Priorities for Use of Additional Funds
"
"
"* Water efficiency, water reuse, and water recycling;
"* Green infrastructure;
"* Source water protection;
"* Reducing nitrogen and phosphorus pollution from wastewater and stormwater;
"* Removing lead service lines that endanger the health of 22 million Americans;23
"* Reducing the amount of water that is wasted due to old, leaky water mains;
"* Fixing deteriorating and outdated drinking water infrastructure, especially in disadvantaged communities that cannot ensure that safe water is provided to their residents; and
"* Ensuring that our water infrastructure is designed to withstand the increased risk of droughts, floods, and other impacts of climate change.
"
"
"The SRFs can provide financial support through a variety of mechanisms including:24
"* low-interest or no-interest loans,25
"* the purchase of debt,
"* loan guarantees or municipal bond insurance if this would improve the credit for the local obligation,
"* revenue or security for state issued bonds that are deposited back into the SRF,
"* loan guarantees to establish local revolving funds that are used for purposes identical to the state's CWSRF,26 and
"* loans where the principal and interest can be forgiven, effectively allowing the SRFs to issue grants, also known as "additional subsidization" or "subsidized assistance."27
"If existing SRF financing mechanisms that are currently authorized in statute, like the ability to issue bonds and provide loan guarantees, were more widely deployed by the states, new capital could be mobilized to meet the nation's water infrastructure needs.
"To realize this untapped potential,
"This could be accomplished by changing the cap that
"Under the Clean Water SRF, those communities, as well as communities that will use SRF funds to promote green infrastructure, water efficiency and reuse, and climate resiliency, are eligible for additional subsidization.29 Under current law, states can only provide subsidized assistance (e.g., grants) up to an amount that equals 30 percent of their annual federal SRF funding and they are barred from providing more, even if they have the financial capacity to do so. 30 In some states, the cap effectively may keep SRF programs from deploying 100 percent of their available funds, whether by grants or loans; funds available for loans can go unclaimed when municipalities lack the credit to borrow even at SRF-subsidized interest rates.
"NRDC recommends amending the SRF statutes to base the cap on additional subsidization on a 10-year rolling average of how much states have invested in their SRF above and beyond their minimum (20 percent) federal match requirements. This reform would provide incentives for states to contribute more funding to their SRFs and allow them to distribute most of those dollars to hardship communities and communities that want to promote green infrastructure, water efficiency and reuse, and climate resiliency. We also recommend that eligibility criteria for additional subsidization under the DWSRF be amended to reflect similar project-specific criteria as currently exist in the CWSRF.31
"Twenty states could immediately benefit from changing the cap, including
"The graph below shows how states that have a history of contributing more than the minimum 20 percent match to their CWSRF could benefit from a statutory change in the definition of "additional subsidization" envisioned by NRDC.
The complete text of the testimony is available at (https://transportation.house.gov/uploadedfiles/2017-09-26_-_levine_testimony.pdf).
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