Following a particularly contentious election year, President Joe Biden took office Jan. 20 in the midst of a global pandemic and a tragic attack on the United States Capitol building. Continuing in our role as the leading construction association working on all underground utility infrastructure, NUCA sent a letter to the Biden transition team laying out the association’s policy agenda as the Biden Administration and the new 117th Congress prepared to dive into the significant infrastructure program they have planned for 2021. This article reports on what legislative action NUCA is planning across 2021.
Water and Wastewater Infrastructure Financing
While NUCA members engage in construction activities related to all underground utilities, water and wastewater infrastructure is our primary market and NUCA members see and address the impacts of neglected American infrastructure up close in their everyday work. Our nation’s dilapidated water, sewer and stormwater systems require hundreds of billions of dollars in needed improvements, and although there are several existing programs that finance these critical projects, all are woefully underfunded.
Serving as the main builders of America’s environmental infrastructure, NUCA encourages participation by both the public and private sector investment. Over the past several years, NUCA has supported a wide range of legislative proposals that would reauthorize and increase appropriations for the Environmental Protection Agency’s (EPA) Drinking Water State Revolving Fund and Clean Water State Revolving Fund (SRF) programs; increase funding for the Water Infrastructure Finance and Innovation Act (WIFIA), which provides long-term, low-cost credit assistance for regionally and nationally significant water and wastewater projects; and authorize municipal grants for construction and planning/design of treatment works to address overflows of combined sewers, sanitary sewers, or stormwater systems, as well grants to promote workforce development in the water utility sector.
NUCA also supported the Water Resources Development Act (WRDA) of 2020, which authorized federal dollars to improve the infrastructure that supports America’s ports, harbors, and inland waterways. While NUCA supports passage of WRDA legislation when it is considered every few years, we continue to encourage greater attention to the water and sewer infrastructure used by Americans every day.
Although our underground environmental infrastructure is indispensable to the health of our country, federal spending accounts for only a small percentage of investments in water infrastructure over the past several years. EPA assessments cite funding needs at approximately a half a trillion dollars – a figure which will only grow as long as necessary improvements are neglected. The new administration and the 117th Congress have the opportunity to make rebuilding water and sewer systems a true priority rather than a convenient political soundbite.
The Role of Private Sector Investment
NUCA has long maintained that while increased public investment in our environmental infrastructure is needed, there is certainly a role for investment from the private sector. Tax exempt facility bonds are a very effective tool for financing long-term, capital-intensive infrastructure projects.
Also known as “private activity bonds,” exempt facility bonds provide tax-exempt financing that encourages state and municipal governments to collaborate with sources of private capital to meet a public need, such as building a water treatment facility through a public-private partnership. This approach makes infrastructure construction more affordable for municipalities and ultimately for end users. Exempt facility bonds utilize private capital instead of public debt and shift the risk and long-term debt from the municipality to the private partner. The lower cost financing often translates to lower costs for the customer.
Last year, the Moving Forward Act (H.R. 2), an enormous coronavirus relief bill, included a provision that would have revised the Internal Revenue Code to provide that wastewater infrastructure would no longer be subject to state volume cap limits subject to exempt facility bonds. Although the legislation was not considered in the Senate last year, this provision has bipartisan support and would take significant steps to open the door to private investment in water and wastewater infrastructure projects.
NUCA looks forward to working with the new administration and the 117th Congress on a comprehensive infrastructure package that includes language that would remove both wastewater and water infrastructure from state volume cap limitations currently subject to exempt facility bonds.
Water Infrastructure Construction as a Job Creator
While investment in water and wastewater infrastructure enhances public health and environmental protection, it also creates high-paying jobs, generates significant economic activity and expands the local tax base. Industry studies have indicated that every $1 billion invested in water and wastewater infrastructure creates up to some 28,000 new jobs with average annual earnings of more than $50,000 and increases demand for products and services in other industries by more than $3 billion.
Due to the economic ripple effect that construction employment offers, investment in water infrastructure generates measurable employment in hundreds of standard industry classifications recognized by the U.S. Census Bureau. Moreover, a $1 billion investment also results in tens of millions of dollars in state and local tax revenue at a time when they need it most.
Essential Workforce, Essential Services
As our members continue to provide essential services while the nation battles the COVID-19 pandemic, NUCA encouraged the Biden transition team to consider those repairing and replacing water and wastewater infrastructure to be a priority in receiving approved vaccines because of the nature of their work.
When the Cybersecurity and Infrastructure Security Agency (CISA) provided initial guidance to help state and local officials protect their communities in the initial response to the coronavirus, NUCA worked last spring to ensure that contractors, manufacturers, and all service providers who collectively assure water, wastewater, and other underground utility services were included on the list of those providing essential services. We were pleased when CISA included “[w]orkers repairing water and wastewater conveyances,” and “contractors for construction and engineering of water and wastewater systems” on its list of Essential Critical Infrastructure Workers.
The Centers for Disease Control and Prevention (CDC) has addressed the risks of contamination associated with those working at wastewater treatment facilities. Although CDC indicates that the risk of transmission of the coronavirus “through properly designed and maintained wastewater systems is thought to be low,” it does report that the “ribonucleic acid from the virus that causes COVID-19 has been found in untreated wastewater.”
In December 2020, the CDC’s Advisory Committee on Immunization Practices released guidance to help states identify higher priority groups for receiving a COVID-19 vaccine. NUCA suggested that while risks of contamination to staff working at wastewater treatment facilities may be relatively low, the risk of contamination to contractors who are in direct contact with the infrastructure that supports wastewater treatment may be considerably higher. Therefore, we have encouraged state authorities to consider those involved in the repair and rebuilding of wastewater infrastructure to be considered a high priority to receiving a COVID-19 vaccine due to the nature of their work.
Keeping America Connected through Fiber Optic Infrastructure
Since the coronavirus hit the nation in earnest last year, the need to ensure highspeed broadband service has been and continues to be a national priority. At a time when the country is “social distancing” and face-to-face conversations are increasingly limited, ensuring Americans across the country have access to broadband service is more important than ever.
Providing for robust broadband construction will likely remain a high-profile issue when the 117th Congress moves on a future COVID-19 relief bill or other legislation intended to address infrastructure needs. However, carriers eligible to receive federal dollars for broadband deployment should utilize the only technology proven to meet current and future demand. This requires installation of fiber-optic technology, and criteria for receiving federal broadband dollars should include requirements for providing higher broadband speeds to encourage fiber installation.
Continued Role of Natural Gas
NUCA members also work to build and rebuild gas distribution systems across the country, and it’s unfortunate to see the increasing hostility regarding the important role that clean-burning natural gas plays in providing a sustainable source of American energy. While we understand intentions to increase use of renewable energy sources, the concept of having to choose between using natural gas or other traditional energy sources presents a false choice. In fact, use of abundant, clean-burning natural gas actually enables the use of renewable fuels.
America will not be able to achieve its clean energy ambitions without substantial growth of natural gas production and an expansion of our natural gas pipeline network. The new administration’s energy platform includes a large expansion of the availability of electric vehicles.
The bottom line is if we’re looking for a significant increase in the number of natural gas vehicles on the roads and substantial increases in the use of renewable energy, we’ll need natural gas to make that happen.
Sharing Responsibility in Damage Prevention
NUCA was pleased to see pipeline safety reauthorization included in the omnibus/COVID-19 relief package that was enacted into law at the end of 2020. As an avid supporter of “shared responsibility” in efforts to protect underground facilities during excavation activity, NUCA supported provisions in the pipeline safety bill that requires operators of gas distribution pipelines to “identify and manage traceable, reliable, and complete records, including maps and other drawings,” and language that will ensure that this documentation is “accessible to all personnel responsible for performing or overseeing relevant construction or engineering work.”
As a leader in the excavation construction industry, NUCA continues to support the “pillars” of underground facility damage prevention to underground facilities during excavation activities. These pillars include mandatory participation in the one-call process (both one-call notification and membership); accurate and timely locating of underground facilities prior to excavation; and “potholing” by excavators so that underground facilities are exposed in order to determine their exact location. The recordkeeping requirements described in the pipeline safety provisions will take important steps towards pipeline safety and provide for safer excavation sites.
However, NUCA members continue to experience situations where responsibilities to locate and accurately mark subsurface facilities are not met, which undoubtably compromises safety. In many of these cases, state authorities responsible for enforcing damage prevention law undermine the spirit of these laws through meaningless fines or a lack of any legitimate enforcement action. This amounts to more than failing to enforce the law – insufficient fines essentially incentivizes the neglect of meeting fundamental responsibilities. Damage prevention needs to be built around safety – not based on business decisions regarding what infrastructure gets marked, and when.
As policies that will be included in a comprehensive infrastructure bill are debated, NUCA encouraged consideration of language that would strengthen state enforcement of damage prevention law. This would increase the safety of all underground utility infrastructure projects, from water and sewer to broadband to gas distribution and electric power. Providing for damage prevention during excavation fundamentally impacts all underground construction.
Consistent with the President’s “Build Back Better” infrastructure initiative, NUCA has offered to serve as a resource to the Biden Administration in discussions regarding building and rebuilding a wide range of essential American infrastructure. We will keep you informed in future columns on the new Administration’s support for our nation’s infrastructure.
Eben Wyman, Principal, is with NUCA’s Government Affairs.