December 2009: Cover Story

2009 Legislative Wrap Up
Big Progress on Infrastructure, but Challenges Remain
By Eben Wyman

The end of any legislative year depicts a common picture — lawmakers in Congress work at a whirlwind pace to push whatever they can before year’s end, and 2009 is no different. At press time (late November), health care reform was effectively gobbling up all floor time in the U.S. Senate, but NUCA was engaged in year-end activities related to a broad range of legislative priorities. The association has achieved considerable success on efforts to expand the water and wastewater infrastructure market, although much work remains to get the industry working again. Health care was obviously in the works, and the harmful card check bill dealing with union organizing issues was still threatening the business community.

While finishing up business for the year, lawmakers and interest groups are also gearing up for what will be an exciting second session in an election year that many believe could turn into a referendum on a young and ambitious Democratic administration. As we reflect on the past year’s successes and future challenges, one thing is certain: 2010 is sure to roll in fast and furious, and NUCA members must be suited up and ready to play ball in the second half of the 111th Congress.

Economic Recovery First Order of Business

Even before Congress first convened on January 6, the Obama White House team and lawmakers on both sides of the aisle agreed on one thing: addressing America’s economic crisis was not simply the No. 1 issue on the agenda, it was the only one. NUCA and the Clean Water Council (CWC), the group of dozens of national construction organizations working on increased investment in environmental infrastructure, wasted no time to ensure that a robust underground utility component was included in the anxiously awaited “economic stimulus” legislation.

Through letters and countless visits to key lawmakers in both the House and Senate, the CWC made the case for significant funding for water and wastewater infrastructure projects, backed with findings of multiple studies from organizations representing infrastructure financing programs. After weeks of intense debate about what was and was not “stimulative,” Congress passed and the president signed the huge, $787 billion American Recovery and Reinvestment Act (ARRA). NUCA supported higher infrastructure investment levels, and we certainly believed that hundreds of billions of stimulus dollars would have been better spent on infrastructure financing. That said, the approximate $20 billion in “environmental infrastructure” funding was a big lump sum of money to help feed what had become a starving market.

Included in this funding was: $6 billion for the EPA’s Clean Water and Drinking Water State Revolving Fund (SRF) programs; approximately $3.5 billion in loans and grants for rural water and wastewater projects funded by the Department of Agriculture’s Rural Utilities Service; $4.6 billion in environmental restoration, flood protection, and other water resources projects overseen by the U.S. Army Corps of Engineers; $700 million for “Superfund” and “Brownfields” hazardous waste clean up; and $200 million for underground storage tank projects. In other infrastructure markets that benefit NUCA members, surface transportation received $27.5 billion for road, bridge and highway improvements, and there was $7.2 billion in “recovery dollars” for broadband deployment.

Delays in Turning Dollars into Projects

After repeated complaints by opponents of the ARRA in Congress, as well as an increasingly frustrated construction industry, lawmakers began holding regular hearings to find out why stimulus dollars were not turning into projects as quickly as supporters had hoped. At a House hearing in November on the status of ARRA water infrastructure investment, Rep. Jim Oberstar (D-Minn.) noted that 98 percent of EPA Recovery dollars under the subcommittee’s jurisdiction has been committed to state governments. Rep. Oberstar maintained that the federal government has done its part, and encouraged states that “are dragging their feet” to expedite the process of turning stimulus dollars into projects. State and local government witnesses agreed that ARRA money was needed and appreciated, but that significant hurdles obstructed ARRA money from hitting the streets in many areas. Front and center were “Buy America” provisions, as well as existing federal environmental requirements that hinder some states in getting ARRA money out the door and into the market. It is important to recognize that under the ARRA, states are not required to have the large majority of ARRA water and wastewater dollars under contract until Feb. 17, 2010 — one year after ARRA enactment.

SRF to Enjoy Huge Increases in FY 2010 Annual Appropriations

After eight years of hostility and devastating cuts under the Bush Administration, 2009 was a great one in terms of SRF appropriations. After being cut in half since 2004, annual SRF appropriations will be raised to more than $3.6 billion in FY 2010. NUCA President Lyle Schellenberg took to the Hill to testify before a House Appropriations Subcommittee that doles out annual funding SRF programs. Underscoring the new priority about our environmental infrastructure, Schellenberg told the subcommittee that “President Obama’s FY 2010 budget reflects a new understanding of the importance of these programs,” and that “this subcommittee has the opportunity to take the next imperative step — providing ‘real money’ through the appropriations process.”

A few months later, Congress provided $2.1 billion and $1.4 billion for the Clean Water and Drinking Water SRF programs next year, respectfully. Additionally, $160 million was provided to address combined sewer overflow (CSO) and sanitary sewer overflow (SSO) problems. The $3.6 billion for water and wastewater infrastructure in next year’s SRF appropriations coupled with the $6 billion in ARRA funding for SRF projects could mean that more than $10 billion in water infrastructure investment will be in the works by the end of 2010, at a time when the industry needs it most.

NUCA Knocking on the Door to SRF Reauthorization

Once again, the House moved first in this year’s effort to reauthorize the SRF programs by passing the Water Quality Investment Act (HR 1262), which would authorize close to $14 billion for the Clean Water SRF over five years, as well as $2.5 billion for CSO projects. Since then, NUCA and the CWC have pushed the Senate to move its version of the bill, which has proved to be a slower game over the past few years.

In May, the Senate Committee on Environment and Public Works (EPW) approved the Water Infrastructure Financing Act (S 1005), a five-year bill that would authorize $38.5 billion to both SRF programs ($20 billion to the Clean Water SRF, $15 billion to the Drinking Water SRF and $1.8 billion for CSO and SSO improvements). Although NUCA and the CWC were close to getting the Senate SRF bill to the floor for debate and a vote just before the August recess, the clock ran out because of the intense debate on health care reform on Capitol Hill and frankly, all over the country. SRF reauthorization remains a high priority for NUCA as well as the CWC, and we look forward to getting the Senate bill passed and moving to a House/Senate conference early next year, making 2010 even more promising for clean water and the utility construction industry.

Calling in the Private Sector

NUCA believes that the intense needs facing America’s environmental infrastructure and the huge economic benefits that come with funding water and wastewater projects warrant investment from any and all sources, including the private sector. In October, the CWC sent a letter to all House offices encouraging lawmakers to support the Sustainable Water Infrastructure Investment Act (HR 537), which would lift the state volume cap on private activity bonds (PABs). Introduced earlier this year by Rep. Bill

Pascrell (D-N.J.), the legislation would significantly increase opportunities for private investment in the water and wastewater construction markets.

PAB’s offer tax-exempt financing by public and private entities for “public need” projects such as a water infrastructure projects. HR 537 would eliminate the state volume cap on PABs for water and wastewater infrastructure projects which are often neglected because of the cap. This would open a lot of doors for private investment. While estimated costs to the government would be a modest $34 million over five years, the legislation could generate as much as $5 billion annually in incremental private capital for water and wastewater infrastructure projects. NUCA is making progress on this bill and will keep the ball rolling next year.

Looking Long Term with Dedicated Revenue

While there has been no shortage of talk about how to best create a new water infrastructure trust fund, until this year there has not been any real legislation that was taken seriously. After NUCA Chief Executive Officer Bill Hillman testified before the House Transportation and Infrastructure Committee on the subject, the CWC agreed to support Rep. Earl Blumenauer’s (D-Ore.) Water Protection and Reinvestment Act (HR 3202) would establish a water trust fund paid for through new taxes on water based beverages, “flushable” products, certain pharmaceuticals and a new corporate tax. The CWC agreed that Rep. Blumenauer’s bill is a good starting point, but that many issues will need to be addressed as the bill moves through the legislative process. NUCA and the CWC will remain in the debate to improve the bill as it moves.

CWC Continues to Grow in Number and Influence

It’s important to note that over the past few years, the CWC has grown to 35 national and international construction contractors, engineers, manufacturers, distributors, labor groups and others working on “all things water.” It is the largest and most influential coalition working on these issues. This year, the CWC released its economic impact study, Sudden Impact: Assessment of Short-Term Economic Impacts of Water and Wastewater Projects in the United States. The study clearly demonstrates that investment in these projects creates significant economic benefits during and immediately after project construction, as well as in the long term during the decades-long service life of each facility. These benefits include the creation of high-quality jobs, enhanced labor productivity and an improved tax base. The report has been used to advance all the above-mentioned legislation and will serve NUCA well for many years to come.

Card Check Legislation Creates Business/Labor Firestorm

In what has clearly turned into the biggest spat between the business community and organized labor in recent years, the poorly-named Employee Free Choice Act (HR 1409/S 560) has become a lightning rod on Capitol Hill, and neither side is giving an inch. The legislation has been labeled “card check” because of the provision allowing for the unionization of a company through a collection of “authorization cards” from a majority of employees instead of a traditional secret ballot process. The legislation is a slap in the face of the Democratic process, and even scarier is language that would also provide binding arbitration between workers and employees if they are unable to negotiate a contract with 120 days after the union is recognized, and a government arbitrator would be appointed to negotiate the contract for them. Finally, the bill would increase fines up to $20,000 per violation for unfair labor practices committed by employers and triples back pay to employees who are discriminated against during an organizational campaign.

NUCA Chief Executive Officer Bill Hillman testifies before the House Transportation and Infrastructure Committee on the subject of how to best create a new water infrastructure trust fund.

Although President Obama has indicated his support for the bill, he soon quietly cooled his support for moving the bill early until the economy starts to get back on track. Moderate Republicans also felt the pressure from union-friendly states who had shown past support for the bill but were feeling increasing heat from the vast majority of American business organizations. NUCA, as a member of the Coalition for a Democratic Workforce (CDW), is fully opposed to card check legislation and will fight it to the finish. Chances of a vote in the Senate on S 560 this year are becoming increasingly unlikely, but the bill will certainly be back early next year, and we hope you will help us in our efforts to protect businesses from the disastrous provisions of this bill.

Health Care Debate Carries Big Implications for American Businesses

You would have to be living under a rock not to know that the issue of health care has dominated the cable media and certainly on Capitol Hill. NUCA is a very active member of the Small Business Coalition for Affordable Health Care (SBCAH), whose primary purpose is to include provisions in the final health care bill that would lower the cost of employers to provide quality health care to their employees at a more affordable cost.

The goals of the coalition are to protect the private insurance market to the extent possible, provide tax incentives for employers to provide insurance rather than “play or pay” mandates that would penalize employers who can’t afford to provide and contribute to health insurance and to help small businesses to pool their resources across state boundaries in order to spread risk in the small group market in order to control premiums.

At press time, the House passed a huge and harmful health care bill, and Senate leaders were looking to get their bill through the Senate by Christmas. The remaining sticky issues surrounded the public option, which would establish a government plan to compete with private insurers, language that would allow or prohibit public money from being used on abortions and restrictions to ensure that illegal immigrants cannot access health insurance funded with public resources. Provisions to address the small business cost issue were still in the works, and NUCA will continue to stay in the debate until the health care bill passes or dies on the vine.

Stay in the Game!

Rest assured, the issues touched on in this article are important, but they are a snapshot of the more than 20 legislative issues we’re currently working on and will continue as we charge into 2010. (See the sidebar on p. 18.) NUCA’s success relies on the countless coalitions it’s involved in that demonstrate a constant presence on Capitol Hill and the participation from you, our grassroots member — which forms and shapes our strong and effective national association. Stay in the game and help carry the NUCA flag.

Eben Wyman is the NUCA Vice President of Government Relations.