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51–016 PDF 2009

OPPORTUNITIES AND CHALLENGES 

IN THE CREATION OF A CLEAN 

WATER TRUST FUND 

(111–49) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

WATER RESOURCES AND ENVIRONMENT 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

JULY 15, 2009 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman 

NICK J. RAHALL, II, West Virginia, Vice 

Chair 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

ELIJAH E. CUMMINGS, Maryland 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ARCURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

LAURA A. RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

SOLOMON P. ORTIZ, Texas 

PHIL HARE, Illinois 

JOHN A. BOCCIERI, Ohio 

MARK H. SCHAUER, Michigan 

BETSY MARKEY, Colorado 

PARKER GRIFFITH, Alabama 

MICHAEL E. MCMAHON, New York 

THOMAS S. P. PERRIELLO, Virginia 

DINA TITUS, Nevada 

HARRY TEAGUE, New Mexico 

VACANCY 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

VERNON J. EHLERS, Michigan 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

CONNIE MACK, Florida 

LYNN A WESTMORELAND, Georgia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

ROBERT E. LATTA, Ohio 

BRETT GUTHRIE, Kentucky 

ANH ‘‘JOSEPH’’ CAO, Louisiana 

AARON SCHOCK, Illinois 

PETE OLSON, Texas 

(II) 

SUBCOMMITTEE ON WATER RESOURCES AND ENVIRONMENT

EDDIE BERNICE JOHNSON, Texas, Chairwoman 

THOMAS S. P. PERRIELLO, Virginia 

JERRY F. COSTELLO, Illinois 

GENE TAYLOR, Mississippi 

BRIAN BAIRD, Washington 

TIMOTHY H. BISHOP, New York 

RUSS CARNAHAN, Missouri 

STEVE KAGEN, Wisconsin 

DONNA F. EDWARDS, Maryland 

SOLOMON P. ORTIZ, Texas 

PHIL HARE, Illinois 

DINA TITUS, Nevada 

HARRY TEAGUE, New Mexico 

ELEANOR HOLMES NORTON, District of 

Columbia 

MICHAEL E. CAPUANO, Massachusetts 

GRACE F. NAPOLITANO, California 

MAZIE K. HIRONO, Hawaii 

HARRY E. MITCHELL, Arizaon 

JOHN J. HALL, New York 

PARKER GRIFFITH, Alabama 

BOB FILNER, California 

CORRINE BROWN, Florida 

VACANCY 

JAMES L. OBERSTAR, Minnesota 

(Ex Officio) 

JOHN BOOZMAN, Arkansas 

DON YOUNG, Alaska 

JOHN J. DUNCAN, JR., Tennessee 

VERNON J. EHLERS, Michigan 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

HENRY E. BROWN, JR., South Carolina 

TODD RUSSELL PLATTS, Pennsylvania 

BILL SHUSTER, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CONNIE MACK, Florida 

LYNN A WESTMORELAND, Georgia 

CANDICE S. MILLER, Michigan 

ROBERT E. LATTA, Ohio 

ANH ‘‘JOSEPH’’ CAO, Louisiana 

PETE OLSON, Texas 

(III) 

(V) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... vii 

TESTIMONY 

Barry, Hamlet J. ′′Chips′′, Manager, Denver Water, Denver, Colorado, testifying on behalf of the American Water Works Association .............................. 9 

Blumenauer, Hon. Earl, a Representative in Congress from the State of 

Oregon ................................................................................................................... 5 

Glance, Dereth, Executive Program Director, Citizens Campaign for the Environment, Syracuse, New York ............................................................................. 9 

Hillman, Bill, Chief Executive Officer, National Utility Contractors Association, Arlington, Virginia ...................................................................................... 9 

Jacobson, P.E., Dale, Jacobson Satchell Consultants, Inc., Omaha, Nebraska, 

testifying on behalf of the American Society of Civil Engineers ...................... 9 

Mittal, Anu, Director, Natural Resources and Environment, U.S. Government 

Accountability Office, Washington, D.C. ............................................................ 9 

Summers, Robert M., Deputy Secretary, Maryland Department of the Environment, Baltimore, Maryland ........................................................................... 9 

Walsh, Thomas, Engineer-Director/Treasurer, Upper Blackstone Water Pollution, Millbury, Massachusetts, Testifying on Behalf of the National Association for Clean Water Agencies ............................................................................ 9 

Young, Kristine L., President and Chief Executive Officer, Miller the Driller, 

Des Moines, Iowa, testifying on behalf of the Associated General Contractors of America ..................................................................................................... 9 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Bishop, Hon. Timothy H., of New York ................................................................. 34 

Carnahan, Hon. Russ, of Missouri ......................................................................... 35 

Hare, Hon. Phil, of Illinois ...................................................................................... 36 

Mitchell, Hon. Harry E., of Arizona ....................................................................... 40 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Barry, Hamlet J. ′′Chips′′ ........................................................................................ 41 

Blumenauer, Hon. Earl, of Oregon ......................................................................... 57 

Glance, Dereth ......................................................................................................... 61 

Hillman, Bill ............................................................................................................. 68 

Jacobson, P.E., Dale ................................................................................................ 111 

Mittal, Anu ............................................................................................................... 116 

Summers, Robert M. ................................................................................................ 128 

Walsh, Thomas ......................................................................................................... 132 

Young, Kristine L. ................................................................................................... 139 

SUBMISSION FOR THE RECORD 

Barry, Hamlet J. ′′Chips′′, Manager, Denver Water, Denver, Colorado, testifying on behalf of the American Water Works Association, brochure ............. 51 

Hillman, Bill, Chief Executive Officer, National Utility Contractors Association, Arlington, Virginia, ‘‘Sudden Impact, an Assessment of Short-Term 

Economic Impacts of Water and Wastewater Construction Projects in the 

United States’’ ......................................................................................................

5 ..................................................................................................................

ADDITIONS TO THE RECORD 

American Beverage Association, Susan Neely, President and Cheif Executive 

Officer, written testimony ................................................................................... 151 

Page

VI 

Aurora Water, City of Aurora, Colorado, Gregory Baird, Chief Financial Officer, written testimony .......................................................................................... 157 

Clean Water Construction Coalition, Robert A. Briant, Chairman, written 

testimony .............................................................................................................. 163 

Crop Life America, Jay Vroom, President and CEO, written testimony ............ 168 

Institute of Shortening and Edible Oils, Inc., Robert L. Collette, President, 

written testimony ................................................................................................. 173 

National Association of Water Companies, written testimony ............................ 181 

Water and Wastewater Equipment Manufacturers Association, Inc., Dawn 

Kristof Champney, written testimony ................................................................ 186 

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(1) 

OPPORTUNITIES AND CHALLENGES IN THE 

CREATION OF A CLEAN WATER TRUST FUND 

Wednesday, July 15, 2009 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON WATER RESOURCES AND

ENVIRONMENT, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, Washington, DC. 

The Subcommittee met, pursuant to call, at 2:17 p.m., in Room 

2167, Rayburn House Office Building, Hon. Eddie Bernice Johnson 

[Chairwoman of the Subcommittee] presiding. 

Mrs. NAPOLITANO. [Presiding.] Good afternoon, ladies and gentlemen. 

Today, the Subcommittee on Water Resources and Environment 

will consider the opportunities and challenges in the creation of a 

Clean Water Trust Fund. 

This Subcommittee has long understood the importance of the 

Nation’s wastewater infrastructure in achieving the goals of fishable and swimmable waters under the Clean Water Act. Over the 

years, this Subcommittee has held numerous hearings on the condition of our wastewater infrastructure and on the adverse impacts 

of deteriorating infrastructure to the Nation’s economy and environment. 

In addition, the Subcommittee has documented the growing gap 

between the need for water infrastructure improvements and the 

annual expenditures for this purpose. For example, current estimates show an annual investment shortfall of between $3.2 billion 

and $11.1 billion for water-related infrastructure. 

This Subcommittee also understands the importance of increased 

infrastructure investment on jobs creation. While this is not the 

primary focus of the Clean Water Act, we must recognize the added 

benefit of the infrastructure investment on job creation and the secondary beneficial impacts on the Nation’s economy. 

With a national jobless rate of 9.5 percent, the highest it’s been 

for 26 years, including roughly 1.6 million unemployed construction 

workers, it is clear that an increase in infrastructure investment 

will have multiple benefits to the Nation at large. 

Earlier this year, this Committee approved H.R. 1262, the Water 

Quality Investment Act of 2009, to reauthorize the Clean Water 

State Revolving Fund at increased amounts over the next 5 years. 

This bill, which is awaiting action in the full Senate, would restore 

the Federal commitment to meeting our wastewater needs in the 

future. However, assuming that actual Federal appropriations are 

made to match levels authorized in that bill, there would still be 

2 

an annual gap between Federal expenditures and the needs for 

clean water infrastructure. That is why we are here today to take 

the first step in a large debate about how best to fund our Nation’s 

water-related infrastructure needs in the future. 

Today’s conversation focuses on one potential option, other than 

general revenues, that may be necessary to address the growing 

water-related infrastructure gaps, the potential creation of a Clean 

Water Trust Fund. The creation of a national trust fund would provide a deficit-neutral, long-term Federal contribution to protecting 

the Nation’s water. A Clean Water Trust Fund should also provide 

greater certainly to State and local governments on the availability 

of sufficient revenues to meet existing and future water needs, both 

through capital expenditures for wastewater infrastructure repairs 

and replacements, as well as potentially addressing other Clean 

Water Act authorities, such as nonpoint source control programs 

and grants to State water pollution control programs. 

This long-term predictability on wastewater infrastructure funding will allow State and local governments to develop long-range 

planning for wastewater infrastructure projects similar to the planning efforts for the Nation’s infrastructure transportation projects 

funded through the Highway Trust Fund. 

Unfortunately, before the debate even started on the benefits of 

a Clean Water Trust Fund, we heard from interest groups who do 

not believe they should contribute to the creation of a trust fund. 

This finger-pointing is reminiscent of the quote attributed to the 

late Senator Russell Long, who said, ′′Don’t tax you, don’t tax me, 

tax that fellow behind the tree.′′ 

I recognize that any debate on identifying potential revenue 

sources for infrastructure investment will be challenging. This 

Committee is already engaged in a similar debate to address the 

current shortfall in the Highway Trust Fund. However, in the opinion of the Chair, we must recognize that the end goal of this debate 

is an increase in infrastructure spending that will benefit the entire Nation. 

It is clear that the need for wastewater infrastructure investment is well documented. It is clear that clean water benefits both 

the human and ecological health as well as the health of the 

United States economy. It is clear that we are all beneficiaries of 

reliable drinking and wastewater infrastructure. Finally, it is clear 

that the creation of a Clean Water Trust Fund should help close 

the gap between infrastructure needs and annual investment. 

It is the opinion of the Chair if we are going to be successful in 

creating a long-term, sustainable, and dedicated source of revenue 

to address our wastewater infrastructure needs, all of the potential 

revenue sources for a trust fund must be put before Congress and 

debated. That means all of the potential revenue sources identified 

by the May, 2009, report of the Government Accountability Office 

need to be put on the table and debated. 

It seems unlikely that interest groups will come to Congress and 

say, tax me. However, at the same time, we must be able to articulate a logical connection between the source of revenue and the 

benefit that comes from clean water. 

I applaud the gentleman from Oregon, Mr. Blumenauer, for taking the first step in this larger debate by introducing the Water 

3 

Protection and Reinvestment Act. I would hope my colleagues agree 

that a Clean Water Trust Fund would be a useful addition to address the Nation’s wastewater infrastructure needs. 

I look forward to hearing the witnesses this afternoon and continuing the debate on the opportunities and challenges to the creation of the Clean Water Trust Fund. 

I just want to say that we are going to waive any Member minutes to move forward with the hearing. 

Mr. Boozman. 

Mr. BOOZMAN. Thank you, Madam Chair. 

We need to ensure that sound Federal policies are in place that 

promote responsible management of our Nation’s infrastructure, 

careful usage of our valuable water sources, and protection of the 

environment. 

Today’s hearing will be about the first of these priorities, making 

sure that our Nation has adequate water infrastructure. This has 

long been an important issue to this Subcommittee. 

Today’s hearing is the latest in a series of hearings our Subcommittee has held on this important issue over the past several 

Congresses. It is also our understanding that this hearing will be 

the first of multiple hearings that the Subcommittee intends to 

hold on how to finance wastewater infrastructure. Our Nation’s 

health, quality of life, and economic well-being rely on adequate 

wastewater treatment. Industries that rely on clean water, like 

farmers, fishermen and manufacturers, contribute over $300 billion 

a year to our gross domestic product. 

To provide clean water, our Nation already has invested over 

$250 billion in wastewater infrastructure, but this infrastructure is 

now aging, and our population is continuing to grow, increasing the 

burden on our existing infrastructure. If communities do not repair, 

replace, and upgrade their infrastructure, we could lose the environmental health and economic benefits of this investment. 

Various organizations have quantified wastewater infrastructure 

needs. The Congressional Budget Office, the EPA, and the Water 

Infrastructure Network have estimated that it could take between 

$300 and $400 billion to address our Nation’s clean water infrastructure needs over the next 20 years to keep our drinking water 

and wastewaters clean and safe. This is twice the current level of 

investment by all levels of government. These needs have been well 

documented in our Subcommittee’s prior hearings. 

We can reduce the overall cost of wastewater infrastructure with 

good asset management, innovative technologies, water conservation and reuse, and regional approaches to water pollution problems. But these things alone will not close the large funding gap 

that now exists between wastewater infrastructure needs and current levels of spending. Increased investment must still take place. 

That leads to the question, where is the money going to come 

from? 

There is no single answer to that question. Municipal wastewater 

services are a State and local responsibility, but there is clearly a 

strong Federal interest in keeping our waters clean. So what we 

need is an effective partnership between all of us—Federal, State, 

and local. That means all partners need to contribute. If we do not 

4 

start investing in our wastewater infrastructure now, it is going to 

cost our Nation billions more in the future. 

Recently, the House of Representatives passed legislation that 

will authorize increased funding for wastewater infrastructure 

through reauthorization of the Clean Water State Revolving Loan 

Fund program administered by EPA. This bill is designed to help 

communities Nationwide meet their growing demand for wastewater infrastructure needs and improved water quality. 

When we do invest Federal funds in infrastructure, we need to 

do it in ways that would give us the best clean water value for the 

dollar. There are a number of potential ways for the Federal Government to invest. For example, we might provide more loan money 

to the SRF program or might provide assistance grants. Additionally, we might increase our investment in research and development of new technologies to improve the efficiency of wastewater 

treatment facilities, or perhaps there are innovative financing options that would make more funds available. 

In any event, the Federal Government is not going to be able to 

solve this problem alone. At the local level, communities need to 

evaluate their assets, make capital improvement plans, identify 

sources of capital to implement the plans, and ask for the rate increases that will apply that capital over a period of time. That last 

part is very difficult. No one likes to spend more. But if citizens 

understand the relationship between clean water and wastewater 

infrastructure, they should be willing to make the investment. 

Recent surveys show most Americans want a sustainable, dedicated source of funding for water infrastructure projects and would 

support the creation of a sustainable trust fund for wastewater infrastructure. One of the most complex aspects of moving from the 

trust fund concept to reality, however, is determining the funding 

sources for such a trust fund. The water and wastewater community has not supported a user fee for a trust fund, and so far no 

other water user has stepped forward in support of a fee or tax in 

their activities either. As a result, it remains unclear how a trust 

fund would get funded. 

A recent GAO report found that stakeholders identified three 

main issues that would need to be addressed in designing and establishing a Clean Water Trust Fund: how a trust fund should be 

administered and used, what type of financial assistance should be 

provided, and what activity should be eligible to receive funding 

from a trust fund. 

While a majority of stakeholders have said that a trust fund 

should be administered through an EPA partnership with the 

States, they differed in their views on how a trust fund should be 

used. Stakeholders vigorously stated that a trust fund should be 

used only to fund the existing Clean Wastewater Revolving Fund, 

that it should support only a new and separate wastewater program, or that it should support both the State Revolving Fund and 

a separate program. Some did not support the establishment of a 

trust fund at all. 

GAO estimated that the revenue could potentially be raised by 

various taxes on a range of previously proposed products and activities and found that it may be difficult to generate $10 billion 

annually from any one option by itself. Rather, it would probably 

5 

require a combination of taxes on more than one of the evaluated 

options to reach the $10 million target level. 

We have requested that GAO conduct an additional study to analyze funding and investment mechanisms and revenue sources from 

potential alternative public or private sources that could be used to 

fund investments in wastewater infrastructure and other water 

pollution control activities under the Federal Water Pollution Control Act. We look forward to those results in a few months. 

I hope our witnesses will bring forward ideas on how we can increase funding for wastewater infrastructure, identify potential 

willing revenue sources, and ensure equitable means for generating 

revenues. While the trust fund may have the advantage of providing a dedicated source of funds for wastewater treatment, how 

to structure the tax to feed the fund remains a challenging task. 

There is no doubt that the Nation’s water infrastructure needs 

are significant and growing. We need at our disposal a wide range 

of funding mechanisms and funding sources to meet our considerable clean water needs. 

With that, I yield back. 

Ms. JOHNSON. [Presiding.] Thank you very much, Congressman. 

First, let me apologize for being late. I was really truly detained 

at the White House by the President, and that is why I was late. 

It is really the truth. 

I am going to bypass all of the opening statements and ask that 

you just file them for the record and go right to our colleague, Mr. 

Blumenauer, for his testimony. 

STATEMENT OF THE HON. EARL BLUMENAUER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON 

Mr. BLUMENAUER. Thank you very much, Madam Chairman, 

Ranking Member Boozman, Members of the Subcommittee. It is a 

pleasure for me to return to the hearing room in which I spent so 

many pleasurable, challenging hours. And I am reminded, Madam 

Chairwoman, that for 10 years I was a Member of your Subcommittee; and it was fascinating to scroll back, thinking about all 

the groundwork that has been laid over the course of a decade with 

you and former Chairman Jim Duncan, trying to put the spotlight 

on an urgent national priority. 

I am pleased to be testifying today; and behind me are some of 

the people with whom I have been working on issues dealing with 

wastewater and drinking water, and how we are going to finance 

it. I can’t thing of a better panel to help you frame the issue going 

forward and people who will be vital partners answering the questions that the Ranking Member just outlined. 

I am thinking back to one of our hearings in March of 2003, a 

hearing entitled, ‘‘Meeting the Nation’s Wastewater Infrastructure 

Needs,’’ that detailed in excruciating, fine, granular efforts looking 

at the gap between wastewater needs and current spending. 

In April of 2004 we had another hearing, ‘‘Our Aging Water Supply Infrastructure’’ looking at the needs of drinking water; and it 

painted a similar picture. The American Water Works discussed a 

report it had released, The Dawn of the Replacement Era. 

In 2005, I think there were truly landmark hearings here in this 

room by the Subcommittee examining the questions that have been 

6 

previously raised and talking about where we go from here. And 

it was fascinating, one of the featured speakers at that hearing was 

the famous Republican poster, Frank Luntz. And his findings, I 

think, were telling, indicating that the vast majority of Americans 

believe clean and safe drinking water is a key national priority and 

that they would support a sustainable, dedicated source of funding 

for water infrastructure projects. 

I commend your staff for an excellent summary, as usual. This 

really drills down and captures it. And one element that they have 

placed before you—and it is one that I think all of us need to raise 

the banner and try and drive the point home—is that, because of 

the wide and increasing gap between urgent local needs and available funding source, we are at risk of losing all our progress for the 

last 40 years. 

It is not a case of helping keep pace. It is not a case of trying 

to keep rates down. The fact is the progress that this Committee 

helped engineer with the Clean Water Act, for instance, is at risk 

because we are falling behind growth and aging systems. 

These hearings, your report, the work that you have done built 

a case for a significant increase in Federal funding. Under the 

Clean Water Act, as we are moving forward—back in the Carter 

administration, the Federal Government provided 78 percent of the 

resources necessary to comply with the Act. It is now 3 percent. It 

is not a sustainable picture. 

Now, we had a number of witnesses in the past; and one element 

of testimony that I thought was very important came from the 

American Beverage Association. And the Ranking Member again 

indicated this is not exactly going to be the simplest task before us, 

because no one wants to be singled out. And they made the point 

right there and that has guided the legislation that I want to talk 

to you about and commend to you; and that is, her industry was 

willing to do its part and pay higher rates that reflected infrastructure needs but didn’t think it was fair to make beverages be the 

sole source of funds. I agree. And that has guided the legislation 

that is before you. 

I won’t, I guess, be increasingly redundant talking about the gap. 

You have some people here that will give you a more immediate, 

urgent, and local perspective on it. But the fact remains we have 

got to do something about dealing with the funding. 

In 2008, when Mr. Oberstar gave me permission to leave the 

Transportation and Infrastructure Committee, it was with the understanding that I would go to the Ways and Means Committee to 

try and find the resources necessary for you to be able to do your 

important work. 

We have been deeply involved for the last 30 months with efforts 

about how we finance rebuilding and renewing America. There is 

no more critical issue, in my judgment, in order to restart the economy, protect the environment, and revitalize our communities. 

You have referenced the GAO study that the Chair, Mr. Oberstar, and I requested. You will hear about it. Yes, there is no silver 

bullet, but it did deal with elements that we can weave together 

to provide a comprehensive approach to funding. 

The point is that the local communities are doing their job now. 

You are going to hear it. And some of you represent communities 

7 

where the local fees, utility rates are crushing, and the prospects 

for the future are of them doubling, tripling, quadrupling in a way 

that is going to pose a huge problem on people with fixed incomes. 

It is crippling business development. What is missing is that the 

Federal Government needs to do a better job, like it did 30 years 

ago, in helping local communities meet the altogether appropriate 

requirements of the Clean Air Act. 

I have introduced legislation, the Water Protection and Reinvestment Act, H.R. 3202, that will establish such a trust fund. We have 

spent countless hours over the last year and a half trying to refine 

the elements. I know it is complex. I think we have given you a 

very good start for how it would work. It is firewalled, like we do 

with the Highway Trust Fund. It would be distributed mainly 

through the Clean Water and Drinking Water State Revolving 

Funds. But there would be additional resources available for critical grant programs, focusing on addressing current and future 

needs, things like combined sewer overflow, climate change. Most 

of the authorizing language will look very familiar to Members of 

this Committee and your staff because we built on your outstanding work in breaking the logjam over the last 2 years. 

We have taken the advice that there not be a single source to finance this. Nobody is going to step forward and voluntarily do it. 

They have a legitimate point that they don’t want to be singled out 

and given the burden of closing the Federal gap. 

So what we have done is look at the four primary areas where 

they rely heavily on fresh, pure water and they burden the system 

and they profit from it. 

There is a 4 cent per container fee on water-based beverages, not 

the whole burden on them, but it is hard to think of an industry 

that is more dependent on an inexhaustible supply of safe, pure 

water. 

The second item is a 3 percent fee on items that are designed to 

be disposed of in wastewater. There are products—toothpaste, cosmetics, toilet paper—that actually, if it weren’t for the ability to 

dispose of them through our sewer systems, the products would 

have little or no value, or they would be very expensive if they 

were required—cooking oil, for instance, you required it to recapture and recycle it. This is directly tied to benefit. 

We are in a situation—and some of you have real problems at 

home—where we are slowly medicating the American population 

because of all the pharmaceuticals that are getting into the drinking water system, with real serious potential health implications, 

extraordinarily expensive for municipalities, whether they are large 

or small, to be able to extract them. This bill would add a small 

fee on the industry to support programs in the legislation to prevent the drugs from entering the drinking water system and to 

support research on remediation. 

The hill would assess a fee of one-fifteenth of 1 percent on corporate profits over $4 million. American industry relies on safe 

drinking water and safe disposal of sewage and stormwater. This 

is, again, a minuscule fee, but it has broad application. 

And, in total, these four sources that have been reviewed in your 

GAO report are sufficient to generate over $10 billion a year on an 

8 

ongoing basis, doesn’t put the primary burden on anyone, and they 

are all connected to beneficial use. It is a user fee. 

President Eisenhower and President Reagan understood the importance of user fees when, in the case of President Eisenhower, 

they implemented a Highway Trust Fund user fee. And both President Eisenhower and President Reagan increased those user fees 

because people benefited. 

You are going to hear from a wide variety of stakeholders—and 

I won’t go through the list—ranging from the American General 

Contractors, the environmental community, American Rivers. 

There have been a wide range of people who really are on top of 

this, and they will work with you to refine the legislation and to 

support some of the tough decisions that need to be made. 

I am particularly pleased with cosponsorship, the original cosponsor of this legislation, including three alumni of our Committee, Congressman LaTourette, Congressman Simpson—actually, 

I guess Congressman Petri is not yet an alumni. I don’t think he 

is on the Subcommittee now. 

I will conclude with a final point. I referenced the research by 

Frank Luntz, who talked about how important this was to the 

American public and how there was broad bipartisan support. Mr. 

Luntz came out with a new poll in January of this year. He found 

that a near unanimous 94 percent of the American public are concerned about the state of our infrastructure. He found these concerns cut across all regions—urban, suburban and rural. He found 

that 84 percent of the American public wanted the Federal Government to spend more money to improve infrastructure; and he found 

81 percent, a majority of Democrats, Independents, and Republicans, are personally prepared to pay 1 percent more in taxes for 

this cause. I would point far, far more—a larger percentage than 

is included in this legislation. 

I deeply appreciate your courtesy in allowing me to testify in 

support of this bipartisan legislation; and I look forward, Madam 

Chairman and Members, to working with you and the other three 

Committees have that been assigned the legislation, to be able to 

help you meet the amazing task that you have been given as a 

challenge to make our communities more livable, dealing with the 

critical water infrastructure. 

Thank you. 

Ms. JOHNSON. Thank you very much. We won’t have questions 

for you right now. 

Mr. BLUMENAUER. Okay. 

Ms. JOHNSON. No, we will not. 

Mr. BLUMENAUER. Oh, we will not. That’s even better. 

Ms. JOHNSON. They will come later. 

Mr. BLUMENAUER. Yes, ma’am. 

Ms. JOHNSON. We will now seat the second panel: Ms. Anu 

Mittal, Dr. Robert Summers, Mr. Thomas Walsh—— 

Mr. BOOZMAN. Madam Chair, I just want to thank Mr. 

Blumenauer. I know he has worked very, very hard on this and is 

very passionate. And this is not something that he has done in the 

last month or so. I know you have been working on this for the couple of years. So we do appreciate you coming and we appreciate 

your testimony. 

9 

Ms. JOHNSON. Thank you very much. 

Ms. Dereth Glance, Ms. Kristine Young, Mr. Bill Hillman, Mr. 

Dale Jacobson, Mr. Hamlet J. ′′Chips′′ Berry. 

I would like to ask each of you to try real hard to keep your remarks at 5 minutes, but you can file your entire statement, and we 

will have it all. 

STATEMENTS OF ANU MITTAL, DIRECTOR, NATURAL RESOURCES AND ENVIRONMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE, WASHINGTON, D.C.; ROBERT M. SUMMERS, 

DEPUTY SECRETARY, MARYLAND DEPARTMENT OF THE ENVIRONMENT, BALTIMORE, MARYLAND; THOMAS WALSH, ENGINEER-DIRECTOR/TREASURER, UPPER BLACKSTONE 

WATER POLLUTION, MILLBURY, MASSACHUSETTS, TESTIFYING ON BEHALF OF THE NATIONAL ASSOCIATION FOR 

CLEAN WATER AGENCIES; DERETH GLANCE, EXECUTIVE 

PROGRAM DIRECTOR, CITIZENS CAMPAIGN FOR THE ENVIRONMENT, SYRACUSE, NEW YORK; KRISTINE L. YOUNG, 

PRESIDENT AND CHIEF EXECUTIVE OFFICER, MILLER THE 

DRILLER, DES MOINES, IOWA, TESTIFYING ON BEHALF OF 

THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA; 

BILL HILLMAN, CHIEF EXECUTIVE OFFICER, NATIONAL 

UTILITY CONTRACTORS ASSOCIATION, ARLINGTON, VIRGINIA; DALE JACOBSON, P.E., JACOBSON SATCHELL CONSULTANTS, INC., OMAHA, NEBRASKA, TESTIFYING ON BEHALF OF THE AMERICAN SOCIETY OF CIVIL ENGINEERS; 

AND HAMLET J. ′′CHIPS′′ BARRY, MANAGER, DENVER WATER, 

DENVER, COLORADO, TESTIFYING ON BEHALF OF THE 

AMERICAN WATER WORKS ASSOCIATION 

Ms. JOHNSON. We will start in the same order that we called the 

names. Ms. Mittal, Director of Natural Resources and Environment, U.S. Government Accountability Office, Washington. 

Ms. MITTAL. Madam Chairwoman, Ranking Member Boozman, 

and Members of the Subcommittee, thank you for inviting us to 

participate in your hearing on the opportunities and challenges in 

establishing a Clean Water Trust Fund. 

At the request of this Committee, GAO just released a report 

that you have just heard about that details a variety of issues that 

will need to be addressed when establishing a Clean Water Trust 

Fund. My statement today is based on the information contained 

in this report. 

Our report identified three main issues that will need to be addressed when establishing a Clean Water Trust Fund. 

First, it is important to decide how the trust fund will be administered. This will involve deciding which agency will manage it and 

whether the funds will support the existing State Water Revolving 

Fund or a separate program. 

Second, it is essential to determine what kinds of financial assistance the trust fund will provide. This involves deciding whether 

the trust fund will make grants or loans, or a combination of the 

two. 

Finally, it is necessary to decide which activities will be eligible 

for trust fund support. These activities could include planning and 

designing wastewater projects and implementing capital improveVerDate Aug 31 2005 10:59 Jul 26, 2010 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 P:\DOCS\51016.0 KAYLA
10 

ment projects, as well as other kinds of activities such as providing 

ratepayer assistance to low-income households. 

The next question you asked us to address was, how can we raise 

$10 billion annually to support a Clean Water Trust Fund? We 

identified various options that could generate this desired level of 

revenues, but each option poses implementation challenges, and it 

may be difficult to raise $10 billion from any single option. Instead, 

Congress may have to consider a combination of several options 

that could collectively generate the level of funding needed. I will 

briefly describe each of the funding options that we have identified 

and the related challenge. 

First, Congress could consider excise taxes on products that may 

contribute to the wastewater stream. These products include beverages, fertilizers and pesticides, flushable products, pharmaceuticals, and water appliances and plumbing fixtures. The amount 

of revenue generated by these taxes depends on the number of 

products taxed and the amount of tax that you apply. For example, 

raising $10 billion just from pharmaceuticals would require a tax 

of 6.4 percent, but raising this amount from water appliances and 

plumbing fixtures would require a tax of 39.2 percent. 

Congress could also consider a per-unit tax. For example, a 5 

cent tax on each bottle and can of beverage sold could yield about 

$10 billion. 

The second option that we identified is to levy an additional tax 

on corporate income. This tax would be similar to the corporate environmental income tax that helped fund the Superfund program 

until 1995. Increasing the current corporate income tax by an additional .7 percent could raise $10 billion. However, this level of taxation would significantly exceed the .12 percent tax that was used 

to support the Superfund program. 

The third option we identified is to levy a tax on water use. A 

tax on water use could be a volume-based charge or a flat charge 

added to the utility bills of all households. A volume-base charge 

of .1 cent per gallon could raise about $13 billion, or a flat charge 

similar to Maryland’s $30 flush tax applied to all households nationwide could raise about $2.6 billion. To raise $10 billion, you 

would need to charge each household $116. 

A final option that we identified is an industrial discharge tax. 

A tax on industrial discharges could be levied in two ways. The 

first would be to levy a fee on NPDES permits, and the second 

would be to levy a tax on toxic chemicals released by industrial facilities. However, it is unclear what level of taxation would be 

needed to generate $10 billion from either of these options, because 

there are no good data on which to base these calculations. 

Regardless of which revenue options are chosen for a trust fund, 

we found that each poses implementation challenges. For example, 

each of these options involves establishing clear and precise definitions of the products or entities to be taxed. In addition, most of 

these options require establishing a collection and enforcement 

framework. And, finally, obtaining stakeholder and industry support for these options poses additional challenges. This is because 

many stakeholders do not perceive a strong connection between 

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11 

structure, and most industry groups are opposed to the idea of Congress taxing their products. 

In conclusion, Madam Chairwoman, while the establishment of a 

Clean Water Trust Fund is a viable option for addressing the water 

infrastructure funding gap, establishing such a trust fund comes 

with a host of challenges; the greatest of which may be obtaining 

stakeholder support. 

This concludes my prepared statement. I would be happy to respond to any questions. 

Ms. JOHNSON. Thank you very much. 

Dr. Robert Summers. 

Dr. SUMMERS. Thank you, Madam Chair, Members of the Committee, for the opportunity to testify today. 

I would like to thank Maryland Congresswoman Edwards for her 

support of the efforts that we in Maryland government are making 

to restore Chesapeake Bay. 

In my testimony today I am going to provide information regarding Maryland’s Bay Restoration Fund. And I want to start out by 

saying, though, that it really would not have been possible to do 

this without very broad support from Maryland citizens. They are 

very concerned about the health of our waters, particularly Chesapeake Bay, very interested in the restoration effort, and so there 

is a long history that this builds on. 

More recently, our Governor O’Malley has really championed this 

through the development of his BayStat Web page, which is actually a very user-friendly source of information regarding the Bay 

restoration effort. It is very consumer friendly, and it provides 

what everybody likes to call transparent information that we can 

use to track our progress in restoring the Chesapeake Bay. And the 

Bay Restoration Fund is a very important, although relatively 

small, part of this. 

Maryland has a very significant water and wastewater need. Our 

most recent need survey indicates over 14 billion for both point and 

nonpoint source pollution control and drinking water infrastructure. 

Maryland’s Bay Restoration Fund covers about $1 billion of this 

need. It is focused on our largest sewage treatment plants and upgrading them to achieve enhanced nutrient removal. It is part of 

our solution, but it is not the whole solution. Maryland very much 

depends upon the State Revolving Loan Fund, financed by the Federal Government; and we strongly support your efforts to strengthen these funds. 

The staff asked a little bit about how this bill was passed. I have 

already mentioned that Maryland citizens are very concerned about 

the Bay. And it really initiated with the signing of the Bay Agreement in 1983. In 1984, Maryland established a General State Obligation Bond Fund to share costs in upgrading our sewage treatment plants in the State. By 2004, about 20 years later, we had 

achieved significant progress, but everyone acknowledged that it 

really was not enough to achieve our goals for cleaning up the Bay. 

And in Maryland’s 2004 session, former Governor Robert L. Ehrlich, Junior, introduced legislation creating the Bay Restoration 

Fund, financed by a $2.50 monthly surcharge on wastewater bills 

12 

and subsequently on the fees paid by owners of septic systems or 

onsite sewage disposal systems. 

It was immediately dubbed the ′′flush tax.′′ And I would just like 

to make one correction. We don’t call it the ′′flush tax.′′ It is the ′′flush fee.′′ And that was a very important aspect of the success of 

this legislation. And when Governor Ehrlich introduced it, there 

was quite a lot of interest and support for it. The legislature actually jumped on board and added to the bill and added a $30-a-year 

fee on onsite sewage disposal systems, and there has been broad 

public support for this effort in Maryland. 

The structure of the fee is very critical to its success, I believe. 

It is paid by all users of municipal wastewater treatment facilities, 

all owners of private onsite sewage treatment systems, and by all 

commercial and industrial facilities that discharge nutrients to the 

water. It is, again, directed to the Bay restoration. It is a nutrientreduction fund. 

The fee, as we have heard, is a flat rate, $2.50 a month or $30 

a year for residential users; and it is paid as a surcharge on sewage 

bills for people who get sewage bills. For folks who live in the rural 

areas and are on septic systems, it is paid directly to the county 

government. 

For commercial and industrial users, the fee is based on a sliding 

scale, depending on how much wastewater they actually produce; 

and it is as a multiple of the amount that is charged to the individual residential owners. 

The fee is being used in two dedicated funds. And it is absolutely 

critical that those funds be dedicated funds. The citizens watch it 

very closely, the Governor, the legislature. There is a requirement 

for an annual report which we have to brief the legislature on 

every year. So that dedicated fund is absolutely critical. 

So, just to sum up, I think the things that we can learn from 

Maryland’s experience for this important effort that we are talking 

about today, we have broad public understanding, a good public 

education effort to make sure people understand the connection. 

The source of the fee is understood to be related to that, and it is 

broadly and equitably distributed amongst the various users and 

the fee, just to emphasize, placed in the dedicated fund, absolutely 

critical. 

I think the items we just heard about that GAO has looked at 

meet a lot of those requirements, and we are very interested in 

working with you further to try to pursue this. Thank you. 

Ms. JOHNSON. Thank you very much. 

Dr. Summers, I forgot to give your title as Deputy Secretary of 

Maryland Department of the Environment in Baltimore. 

Ms. JOHNSON. Mr. Thomas Walsh, Engineer-Director, Treasurer—he runs the whole thing there—Upper Blackstone Water Pollution in Millbury, Massachusetts. 

Mr. WALSH. Good afternoon, Chairman Johnson and Members of 

the Committee. 

As you said, I am Tom Walsh. Just one small correction, it is not 

Upper Blackstone Water Pollution. It is Upper Blackstone Water 

Pollution Abatement District in Worcester, Massachusetts. 

I am honored to testify here on behalf of the National Association 

of Clean Water Agencies regarding the establishment of the Clean 

13 

Water Trust Fund to help finance wastewater infrastructure 

projects. NACWA represents the interests of publicly owned wastewater treatment utilities, and many of our members also provide 

drinking water services. 

Projects financed through the trust fund will help ensure the protection of our vital water resources, improve public health, provide 

recreational enjoyment for all Americans, and promote economic 

prosperity. 

This hearing and the recently released GAO report on potential 

ways to finance and structure a Clean Water Trust Fund are important steps toward a long-term, sustainable revenue source to address the serious water and wastewater infrastructure funding gap. 

We believe a Clean Water Trust Fund is critical to ensuring communities continue to meet the Clean Water Act obligations. 

We commend GAO for its fair and objective report, including its 

review of a water tax. We also commend Congressman Blumenauer 

for introducing the Water Protection and Reinvestment Act, H.R. 

3202, and for appreciating that a water tax does not bring new 

supplemental money to the table, for recognizing the need to fund 

wastewater, drinking water and stormwater projects, and for understanding very broadly that water is water. 

Municipalities face serious challenges in meeting their clean 

water goals. Among them are growing population, aging infrastructure, increased regulatory requirements and stepped-up enforcement from EPA, and global competition driving the cost of labor 

and materials. In order to meet these challenges, all levels of government—Federal, State and local—must commit to a partnership 

that recognizes the role of science in establishing water quality criteria, utilizes pragmatic planning to prioritize projects, and understands the need for more investment in our Nation’s clean water 

infrastructure. 

As the cost of compliance continues to go up, we see an infra- structure funding gap of $300 to $500 billion over the next 20 

years. Meanwhile, EPA estimates that more than 40 percent of the 

Nation’s water bodies remain impaired, a figure that has not 

changed in 20 years. In other words, the water quality gains 

achieved since the Clean Water Act was enacted in 1972 have essentially plateaued. Without a significant recommitment by the 

Federal Government and a change in the regulatory paradigm, we 

risk rolling back the water quality gains achieved in the past 37 

years. 

Federal investment in clean water has declined sharply. Municipalities currently pay about 95 percent of the cost of wastewater 

infrastructure and 99 percent of the cost of drinking water infrastructure. NACWA’s own Triennial Service Charge Index projects 

a steady rise in the average residential service charges over the 

next 5 years, and it anticipates that annual average cost to singlefamily residences will increase nearly 34 percent between 2008 and 

2013. 

Since 2000, rates at my utility, which provides only treatment 

services to our members, have increased 450 percent in order to 

pay debt service for ongoing plant upgrades required to meet more 

stringent discharge standards. This has resulted in a 110 percent 

increase in sewer rates to our largest member community, which 

14 

has a median household income of $36,000 per year. It goes without saying the small rural and low-income communities will be hit 

hardest by these increased costs. 

This brings us back to the subject of today’s hearing, how to finance the enormous clean water funding need. Momentum is building to address the infrastructure funding gap in a meaningful way. 

We appreciate this Committee’s work to move legislation increasing 

Federal funding for clean water infrastructure, including bills to reauthorize SRF and to provide $6 billion in stimulus funding to address our needs. 

While this represents solid steps forward, we must remove water 

infrastructure investment from the realm of uncertain annual appropriations and focus on a dedicated funding system. Municipalities are willing to share and will continue to do so. However, 

NACWA believes that the Federal Government must do more to 

address the shortfall facing our Nation’s publicly owned wastewater treatment agencies. If highways merit a trust fund at $30 billion a year and airports, $10 billion, why should we not have a water trust fund for a national resource each of us uses every single day. 

During deliberations for the Clean Water Act, Congress decided 

that water infrastructure was a national good that demanded Federal investment. Representative Blatnik, the Chair of this Committee at the time, said the task of cleaning up the Nation’s waters 

was even more monumental than establishing the Interstate Highway Program. Congress created a trust fund to ensure the longterm viability of the Nation’s highway system. We ask that Congress do the same for our Nation’s waterways. 

We look forward to working with you, the water infrastructure 

network and associations representing drinking water utilities that 

support the Blumenauer bill. Thank you for your time and for allowing NACWA to share its views on clean water funding for the 

21st century. 

I would be happy to try to answer any of your questions. 

Ms. JOHNSON. Thank you so very much. 

Ms. Dereth Glance, Executive Program Director, Citizens Campaign for the Environment, Syracuse, New York. 

Ms. GLANCE. Thank you, Chairwoman Johnson, Ranking Member Boozman, and distinguished Members of the Committee. It is 

my great pleasure to testify before you today on the need to establish a dedicated fund for clean water for all Americans. 

My name is Dereth Glance. I am the Executive Program Director 

with Citizens Campaign for the Environment. We are an environmental and public health advocacy organization supported by over 

80,000 members throughout New York and Connecticut. I also 

serve as the Treasurer and a board member on the National Clean 

Water Network and I also serve on Governor Paterson’s Clean 

Water Collaborative. 

I believe establishing a dedicated fund to ensure that Americans 

have access to safe drinking water and that American waters are 

no longer fouled by sewage and polluted runoff is long overdue. The 

need is overwhelming and urgent. In New York State alone, we are 

estimated, over the next 20 years, to need $74 billion to meet our 

clean water and drinking water needs. Nationally, the EPA puts 

15 

that estimate at $722 billion. To bring that back home, in Syracuse 

we need $1 billion to deal with our aging water pipes alone. 

I can speak at length about the overwhelming quantities of raw 

sewage that pour into our waters that happens almost every day. 

Just on the 4th of July weekend at Lake George, on their milliondollar beach, over 6,000 gallons of raw sewage spewed onto the 

beaches, closing the beaches, ruining summer vacations and the 

businesses that depend on those tourists. 

The same is true for our water mains. On Mother’s Day in Syracuse over 1 million gallons of water flooded downtown churches, 

day-cares and businesses, closing a day-care permanently. 

We have removed lead from gasoline, from paint, and from toys. 

Now is the time to ensure that our children and Members of Congress and your staff can drink tap water that is not delivered 

through lead-leaching pipes. Water is a powerful compound and 

sewage is caustic. 

With so many other problems in plain sight, investing in clean 

water is often ignored for too long until it is too late and it is even 

more expensive. We must make rebuilding and reinvesting in a 

fundamental sanitary service a national priority. We need Federal 

resources to protect Americans and our right to basic sanitation. 

Sewage treatment plants are some of the energy-intensive and 

expensive municipal taxpayer expenses. By investing in energy and 

water efficiency, we have many benefits to gain, as well as controlling our costs. We can look at an example just in Dallas. They have 

been able to avoid controversial water projects by providing incentives for both the commercial and residential consumers to practice 

water efficiency practices. 

Now, a dedicated and robust Clean Water Trust Fund will assist 

States and local municipalities in closing that gap for water infrastructure, and the economic benefits will be felt far and wide. We 

are going to be improving water quality, creating jobs, and protecting public health. And I applaud Congress, and especially the 

leadership in this Committee, for including much-needed funding 

in the American Recovery and Reinvestment Act. In particular, 

there was key language that was included that encouraged green 

infrastructure, innovative solutions that promote outside-the-pipe 

thinking and also provided funding for water and energy efficiency 

improvements at our treatment plants. 

And I am also encouraged by the much-needed funding that is 

moving forward through the SRF authorizations for both clean 

water and drinking water. The SRF is an effective and important 

funding source for American water projects, but its need consistently exceeds funding. The solution is the American Water Protection and Reinvestment Act. It outlines a 21st century approach to 

deal with our 21st century water needs. 

And I want to highlight a few of those key provisions for a successful Clean Water Trust Fund. 

First, we need a fix-it-first approach. We need to make sure this 

fund is not funding pipes to nowhere. We need sensible growth. We 

need to make sure that we have funding research and development. Our 21st century water infrastructure needs need to be 

grounded in 21st science and engineering. We need to have national research centers and programs at our universities to develop 

16 

those bright minds to bring about a sustainable water future. We 

need to encourage our innovative clean water solutions. 

The EPA tells us to manage water efficiently. We need slow it 

down, spread it out, and soak it in. 

We need to make sure that we are keeping pharmaceuticals out 

of the water. Our treatment plants are not equipped to deal with 

removing endocrine-disrupting and estrogen-mimicking medications. 

Grants are necessary for our local municipalities that are cash 

strapped. 

We need to deal with climate change and mitigation. These are 

challenges that water infrastructure has not seen, and they can be 

part of the solution by generating clean renewable energy on-site. 

We need to supplement, not supplant, the SRF. And we need 

dedicated funding from a variety of sources. The small fees on pesticides, beverages, and users create a sensible and diffuse way to 

fund this program. 

And of all things, water is a public trust. It is necessary for us 

to drink or we perish. And of all things to hold in public trust what 

could be more important to Americans than access to save and 

clean water? Thank you. 

Ms. JOHNSON. Thank you very much. 

We have a vote and we have five votes. That is going to take at 

least 30 to 40 minutes, but we will have to take a break and come 

back. And I apologize if this is going to mess your day up so much, 

but they don’t listen to us on that floor. 

With that, we will return and the questions will come after we 

complete the testimony. 

Mrs. NAPOLITANO. [Presiding.] The Water Resources and Environment Subcommittee hearing on Opportunities and Challenges 

in the Creation of a Clean Water Trust Fund has now reconvened. 

We will move on to our next witness, Ms. Kristine Young, President and Chief Executive Officer, Miller the Driller, Des Moines, 

Iowa. 

Welcome. 

Ms. YOUNG. Hi. As you said, I am Kris Young from Des Moines, 

Iowa. I would like to thank you for having me here, and we are 

excited to be a part of this process. 

I am part of a family-owned business. We have been in construction for 62 years now, and we have helped municipalities and communities recover when systems have gone down. So we are very 

much aware of what goes on at the local level, the State level and 

at the Corps of Engineers. I am a certified DBE in many of the 

States that we work in, and I am very proud to be here to represent the 33,000 members of AGC of America on the Opportunities and Challenges in the Creation of a Clean Water Trust Fund. 

Even before the current economic downturn, many of our cities 

and towns have experienced substantial challenges repairing and 

replacing water infrastructure that is quickly reaching the end of 

its useful life. Many communities do not currently have the resources to make the investments necessary to replace aging infrastructure and meet Federal water quality standards. 

As a contractor, I see firsthand what neglecting our infrastructure can do to our communities. As a resident of Des Moines, Iowa, 

17 

I also know what it is like to go without water for 30 days, when 

your water system goes down in a flood in 1993. 

Until recently with the passage of the Recovery Act, which is providing over 7.4 billion for EPA and USDA water programs, congressional appropriations for water infrastructure projects have been 

diminishing steadily over the years, while our needs are ever increasing. Our industry is facing a crisis much like the infrastructure. In June alone construction employment declined by 79,000 

jobs while over the past 12 months almost 1 million construction 

workers have lost their jobs. Overall, unemployment is at 9.7 percent, but 17.4 percent of construction workers are now unemployed. 

The GAO report, which is the subject of the hearing today, acknowledges that our Nation faces tremendous challenges in replacing and rehabilitating our water infrastructure. We are all aware 

of the various studies, projecting needs approaching 600 billion 

over the next 20 years. 

As the GAO’s report to this Committee states, the trust fund for 

water infrastructure would establish a multiyear commitment to 

address the Nation’s pressing water needs. If Congress can develop 

a fair and defensible system for raising the revenue, a water infrastructure trust fund is achievable, and the benefits to the American 

people, business and environment would be enormous. 

Infrastructure investment enhances our quality of life, provides 

good-paying jobs for Americans. In fact, a study conducted by AGC, 

completed in the spring of 2008, estimated that every 1 billion in 

nonresidential construction spending would add about 3.4 billion to 

the gross domestic product, about 1.1 billion to personal earnings 

and create and sustain over 28,000 jobs. 

At the Federal level we have used dedicated trust funds to tackle 

problems too big for States to handle alone. Financing water infrastructure through a trust fund would have advantages over general 

fund financing. It would be deficit neutral. The funding stream 

would not be subject to the annual appropriations process, providing the certainty that State and local officials need to commit 

to long-term infrastructure financing. And it would get the job 

done, providing the revenues for revision to meet the need. 

We as an association have been dedicated to educating our members and the public about the current needs that exist in clear 

terms that every American can understand. With our support, the 

Penn State Public Broadcasting documentary Liquid Assets, the 

State of Our Water Infrastructure, has been broadcast over 700 

times in 94 percent of the PBS stations. We thank the efforts of 

Chairwoman Johnson and Ranking Member Boozman and all 535 

Members of Congress who have received and hopefully looked at 

the Liquid Assets documentary. 

The number of Americans who understand the need to improve 

our water infrastructure is growing, and their patience is diminishing as those who have failed to make investment in water infrastructure a priority. AGC acknowledges that in these tough economic times, raising taxes may be a difficult pill for the American 

public and corporate America to swallow. However, we think infrastructure is different. It is an investment program, and we have an 

obligation to provide the American people with the assurance that 

18 

the water they drink is clean and safe and that our infrastructure 

is delivering environmental benefits. 

I thank you for the opportunity to speak to this Committee 

today. 

Mrs. NAPOLITANO. Thank you for your testimony. 

And in light that Mr. Barry has a plane to catch, we will jump 

over—gentlemen, if you don’t mind. 

Mr. BARRY. Thank you, Madam Chairman. I appreciate your letting me testify today and in changing the order a little bit. That 

is very gracious of you. Thank you. 

Mrs. NAPOLITANO. Thank the gentleman. 

Mr. BARRY. And I thank the gentlemen to my right who have to 

suffer through my testimony first. I will keep this very brief. 

I am testifying on behalf of the American Water Works Association, which is an association of utilities throughout the United 

States, more than 50,000 members. There are utilities in every 

State, and certainly all the large utilities in the country belong to 

AWWA. That is whom I am representing, although my job is as 

General Manager of the Denver Water Department. 

I just have a couple of things to say about this bill. I am not here 

to oppose it. I am not here to support it. I want to make some observations and give you some perspective about it. 

Number one, the primary responsibility for funding water and 

wastewater infrastructure in this country has always been local. 

We think it should remain so. Americans are best served by water 

systems that they pay for themselves. It is more responsive. It is 

direct government, it is direct democracy; we don’t want to see that 

change. 

Aging water infrastructure in this country is an issue, but I don’t 

think it is a crisis, and all the infrastructure is not crumbling. 

There are many reports and a lot of numbers out there, but the 

thing I want the Committee to remember is that the water industry itself now invests $80 billion a year in water and wastewater 

infrastructure. That is $80 billion a year. 

Now, this funding gap of 300-some-odd billion, supposedly, after 

20 years is, in fact, only a 20 percent funding gap. And EPA itself 

says that if utilities will increase their water rates at 3 percent 

above the rate of inflation, that gap is largely closed. Though it is 

not a crisis and it is not all crumbling, it is an issue that we have 

to pay attention to on a local, issue-by-issue, State-by-State kind of 

basis. 

Now, there is definitely a role for the Federal Government in 

lowering the cost of capital. And particularly, in special circumstances, low-income communities, combined sewer overflow 

problems, small systems, there is a disparity in the ability of different communities to fund their infrastructure, and the Federal 

Government can help. 

I think that is very important to note that they can help, but I 

am not—one of our concerns is, I don’t want to see the Federal 

Government take over this responsibility. It is a local responsibility 

and it needs to remain so. 

One of our concerns about the bill is, we think that a trust fund 

is, in fact, not a very good mechanism. I think most of the ComVerDate Aug 31 2005 10:59 Jul 26, 2010 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 P:\DOCS\51016.0 KAYLA
19 

mittee knows this, but the words ′′trust fund′′ in Federal Government parlance don’t mean what they mean to the rest of the world. 

Federal trust funds don’t have trustees, they don’t have beneficiaries and they don’t have segregated assets. They are simply accounting entries that Congress can change or eliminate at any 

time. There are 400 Federal trust funds; I think almost none of 

them actually spend all the money that comes supposedly to them 

for the purposes for which they were created. 

What I worry about is, we create a trust fund, create an expectation that the Federal Government is going to solve this problem 

through a trust fund, and in fact that is not the case. The history 

of trust funds tells you that it is a false promise, it won’t work that 

way; that is one of our concerns. It is not that we oppose these 

taxes or that we oppose any Federal Government involvement. It 

is that the promise will be far greater than the performance, and 

the history of trust funds is very clear about that. 

We think there are more effective tools to get Federal help to the 

communities that need it. One of them is something called a water 

infrastructure bank. We have—AWWA has written a report about 

that. That bank could build on and leverage SRF money. 

Another thing we think is important, and it is in the bill, is 

broadening and enhancing the purposes and the mechanisms by 

which SRF money is administered. SRF money right now can’t be 

used to fix aging infrastructure. That needs to be fixed, and that 

is in the bill, and we certainly appreciate that. 

The last thing I want to say—or almost the last thing, and there 

was a reference to it in the GAO testimony—is about a water tax. 

A water tax is something that makes many of us in the utility industry extremely nervous. We are not in favor of a national water 

tax, partly because it is an inefficient way to collect and spend 

money, partly because it, in effect, punishes those cities—and there 

are many of them—municipalities who have maintained their systems to a high degree, who would now be taxed to have that money 

sent somewhere else. 

If this is a local responsibility, let us keep it generally local. We 

think that is an important concept. 

There are many things that AWWA is for in this arrangement 

and that is listed in the testimony; I won’t go into detail about 

that. 

I will conclude with one thought, and that is that this bill, to me, 

implies—it doesn’t say it explicitly, but it implies that clean water 

and wastewater infrastructure is no longer a local responsibility, 

the Federal Government is going to take care of it. Well, first of 

all, that doesn’t give me any comfort. Second of all, the mechanism 

that the Federal Government in this bill was going to use is a trust 

fund. 

The trust funds don’t work in the way they are supposed to 

achieve this objective. 

Mrs. NAPOLITANO. Mr. Barry, would you wrap it up please, sir. 

Mr. BARRY. Madam Chairman, I am wrapped up. I appreciate 

your letting me give this testimony. We like some parts of the bill, 

we don’t like others; and you have heard some of our concerns and 

observations. Thank you. 

20 

Mrs. NAPOLITANO. Thank you very much for your testimony. 

Your concerns are noted. Some would agree; some would disagree. 

But we very much appreciate the fact that you have been very constructive in criticism. So thank you sir. 

And you are dismissed if you need to catch your plane. Thank 

you, sir. 

We will now hear from Mr. Bill Hillman, Chief Executive Officer, 

National Utility Contractors Association, Arlington, Virginia. 

Welcome, sir. And you’re on. 

Mr. HILLMAN. Thank you, Madam Chair, and thank you so much 

for including us in this important proceeding today. I want to 

thank the Ranking Member and the Full Committee, as well as Mr. 

Blumenauer and GAO, for getting us to where we are today in this 

discussion. We supported this idea of a trust fund for many years, 

and it was lonely for a while; and now it is not, and it was due 

to all your efforts. 

At the outset, I want to share that we do support in concept the 

creation of a trust fund. And I would like to take a few moments 

to explain the key reasons why we do and, time allowing, some 

ideas on how it might be structured to be most effective. 

But first, at the request of a couple of Subcommittee Members, 

I would like to discuss for a moment why the investment gap that 

has been mentioned really matters. Because, for example, some 

speakers, including the previous witness, don’t think it is really a 

crisis, and they make a case for that; and we have got some Members who think it is not a crisis. 

But just because people aren’t dying right and left doesn’t mean 

it is not a crisis. Its ramifications are not just inconvenient, they 

are very serious. And some of the previous testifiers, as well as Mr. 

Blumenauer, outlined quite succinctly and well some of the environmental protection implications and public health ramifications 

of our failure to address this growing gap. 

However, I want to add one more factor to the mix that we think 

is very important. 

The failure to narrow this gap effectively puts an economic 

straightjacket on our economy for a number of reasons, which I will 

explain. We recently, for example, put out a study through our coalition, the Clean Water Council—I think everybody has got a 

copy—called Sudden Impact, and it has been out for months. We 

released it with the consideration of the recovery package, but it 

extends far beyond that. 

This shows in the short term only, that is, during the period of 

construction only, a billion-dollar investment, similar to the AGC 

study, results in substantial, real changes in economic output; increases personal incomes which are spent on the economy; increases State and local tax coffers; and last, but certainly not least, 

extensive employment ramifications. 

We can create almost 27,000 jobs per billion at an average income of more than $50,000 per year. And for those of you who may 

be rolling your eyes after some of the numbers thrown out during 

the stimulus package hearings, you can stand by—these numbers 

are based on actual data from 116 jobs completed in the last year, 

and they are run through two economic models. So we felt we can 

21 

look in the mirror in the morning and cite these figures without 

running away, and we want to point those out to the Committee. 

That explains why it is a crisis. 

There is another aspect to it. The problem, we believe, is structural. Despite all the efforts by the State and local governments 

and the SRF and bond referendums and everything else, the gap 

is not being diminished. And let me illustrate very quickly what I 

mean. 

In 1980, we were told the needs were 125 billion for wastewater. 

We spent 75 billion in the next 10 years to reduce it. Twelve years 

later the needs had gone up to 132 billion. That pattern has been 

continued every 2 to 4 years to the point where the gap is over 

$200 billion. 

What that says to us, business as usual, it hasn’t been working. 

Furthermore, we believe—and we don’t have a study for this, but 

even if you implement full-class pricing like many want to do and 

even if you have proper asset management and even if, as this 

Committee has done and the House has done, you pass a good SRF 

reauthorization bill and even with the recovery package, you are 

still going to have a gap. 

So something new, fresh and innovative has to be done. I think 

it is very difficult to argue against that. The big issue is what do 

you do? That is the big question. And we believe a trust fund, for 

a couple reasons, is the best mechanism. 

One is, it can raise enough money to actually do something about 

the problem. 

Number two—and, Madam Chair, you touched upon this in your 

opening statement—a trust fund that cites adequate funding provides consistent funding. It is very important for not only private 

sector contractors and engineers and labor, but also for State and 

local government. If you can’t predict what funding is going to be, 

if you base your planning off of what the Subcommittee is going to 

vote on, what the President is going to introduce and what some 

voters are going to do, you are going to be a lot less likely to ramp 

up your employment and go out and buy that $300,000 track hoe 

and have enough jobs, shovel ready, when the opportunity arises. 

And I think that is another important point in favor of a trust 

fund. 

The third point is—and I disagree with at least one of the other 

witnesses on this—I think there is a Federal role to be played. The 

reason is actually quite simple. Water pollution is an interstate 

need, and the Federal Government is going to have to be involved 

in partnership with State and local. But as long as we have got the 

Pacific Ocean and the Atlantic Seaboard and the Mississippi River 

and the Great Lakes and the Chesapeake Bay and a hundred others, there is going to be a Federal role to play in financing. 

That concludes my 5 minutes. If I get a chance later on, I would 

be happy to share some ideas about how we would structure this 

and another idea for including additional stakeholders in the process. 

Thank you. 

Mrs. NAPOLITANO. Thank you very much for your testimony, sir. 

Mr. Dale Jacobson, Jacobson Satchell Consultants, Omaha, Nebraska. 

22 

Thank you for your patience, all of you. 

Mr. JACOBSON. Good afternoon, Madam Chairwoman, Representative Boozman, and Members of the Subcommittee. My name is 

Dale Jacobson. I am a licensed professional engineer in Nebraska 

and Iowa, and the President of Jacobson Satchell Consultants, a 

consulting firm with offices in Omaha and Denver. I have about 40 

years of experience in engineering wastewater and drinking water 

projects. 

Today, I am pleased to appear on behalf of the 146,000 members 

of the American Society of Civil Engineers to testify on opportunities and challenges in the creation of a trust fund to provide funding for clean and safe water and to discuss the Water Protection 

and Reinvestment Act introduced by Mr. Blumenauer. 

America’s drinking water and wastewater infrastructures systems are aging. Many systems are well beyond their design lives. 

New methods of financing improvements to these critical structures 

are vitally needed. 

ASCE believes that funding for water infrastructure improvements and the associated operations requires a comprehensive program to provide financial support. To that end, ASCE supports the 

creation of a trust fund to finance the national shortfall in funding 

of infrastructure systems under the Clean Water Act and the Safe 

Drinking Water Act. 

The Blumenauer bill would create a trust fund for drinking 

water and wastewater infrastructure needs and raise approximately $11 billion annually from new sources of revenue, each designed to provide a constant source of funds. The bill would provide 

a budgetary firewall to ensure that all moneys received into the 

trust funds would be appropriated into the two State revolving loan 

funds. 

There are some important points to be made about the bill before 

you. This legislation is vitally needed. If enacted, the Water Protection and Reinvestment Act would begin the process of restoring our 

Nation’s threatened surface water and drinking water resources. 

In March, ASCE released its 2009 report card for America’s infrastructure. We identified a $2.2 trillion need for infrastructure 

funding over the next 5 years with about half of that money assured under current funding arrangements. This leaves a gap of 

$1.1 trillion to be met from new sources of revenue. 

In our report card, drinking water earned a D- and wastewater 

also earned a D-. Our annual shortfall of $11 billion is needed to 

replace aging facilities that are near the end of their useful life and 

to comply with new and future Federal regulations. This does not 

account for growth in demand for drinking water and wastewater 

services over the next 20 years. 

Americans still enjoy some of the best tap water in the world, 

and as the gentleman from the American Water Works Association 

pointed out, it is delivered locally. But there are costs for treating 

and delivering that water that continue to outpace the funds available at the local level. A similar situation for funding exists with 

our wastewater systems. 

The bill would establish a trust fund that would receive money 

from the new taxes. Unlike other trust funds with a single source 

of revenue, the water infrastructure fund would have multiple 

23 

sources of revenue, thus ensuring a more stable and dependable 

source of support for essential water systems. 

In January, this Committee led the fight to pass the American 

Recovery and Reinvestment Act. That act, signed into law in February, provided an estimated $100 billion for all U.S. infrastructure 

needs as an emergency job creation measure for fiscal year 2009. 

The Blumenauer bill will also create badly needed jobs. The Recovery Act and this legislation are more than about jobs. They represent a partial down payment on the $1.1 trillion, 5-year infrastructure investment gap identified by our report card. That is why 

ASCE strongly supports the creation a trust fund to finance the national shortfall in funding of infrastructure systems under the 

Clean Water Act and the Safe Drinking Water Act. Such a trust 

fund would provide source funding for many decades to come. 

Let me close with a few brief points. The Nation’s infrastructure 

faces some very real problems that threaten our way of life if not 

addressed. We determined in March that these problems are solvable, but we need to have the needed vision and leadership. Raising the grades on our infrastructure will require us to seek and 

adopt a wide range of structural and nonstructural solutions in 

every category, including technological advances, funding and regulatory changes and changes in public behavior and support. 

ASCE developed several strategic solutions to begin raising the 

grades. One of these is to increase Federal leadership and infrastructure to address the need for additional funding. This proposal 

would create a trust fund for water as the first step in that leadership. 

Madam Chairwoman, thank you for your time; and I conclude 

ASCE’s testimony and would be pleased to respond to any questions you may have. 

Mrs. NAPOLITANO. Thank you, sir, for your testimony. 

And that wraps up the testimony and we begin the questions to 

the panel. There are lots of them. I mean, I don’t know where to 

start. There are certain things that have come up that bear a little 

bit more enlightenment, if you will. 

Mr. Hillman’s testimony clearly stated that existing appropriations are insufficient to meet clean water needs, the current clean 

water needs. But how about the rest of you? What do you think? 

And I know it is not necessarily within your realm, Ms. Mittal, 

but I would appreciate it if you would be able to give some comment on this. Because I agree, there is just not enough in the stimulus, not enough in the ARRA to be able to do the needs of the infrastructure. 

And I disagree with Mr. Barry in terms of being able to say that 

they don’t want government to set up a trust fund ′′because.′′ Well, 

we need to do something. We need to be able to help small communities that do not have the ability to do it on their own and be able 

to see, whether it is lead or anything coming out of the infrastructure, how do we deal with it and be able to not tax the people or 

tax all the businesses? 

Everybody calls it a ′′tax,′′ but certainly it bears a lot of soul 

searching about what we need to do. So would you, please? 

24 

Ms. MITTAL. Sure. As you said, this was not the main focus of 

our report, but during the course of our work, there were a couple 

things that came to light. 

One is, even though it is very difficult to figure out exactly what 

the funding gap is, there is a pretty strong consensus that there 

is a funding gap. Second, the SRF is a very important tool, but over 

the years the funding for the SRF has been declining; and finally 

the ARRA provided $4 billion, but that was, as you know, a onetime deal. 

So a couple of things that we did notice, and as you just mentioned, is that with the SRF there are certain limitations, and 

small communities in particular, as well as very large communities 

that have mega projects, are not able to get the money that they 

need from the existing SRF. Stakeholders told us that having a 

Clean Water Trust Fund that provides a little bit more flexibility 

to meet those needs would be beneficial. 

Mr. SUMMERS. In my written testimony, I address the gap. Specifically, Maryland has a 14 billion need, based on our latest need 

survey. 

We currently, a combination of State, Federal and local funds, 

have about 130 million a year coming in to meet that need. And 

I guess a conservative estimate of the gap is about a half a billion 

a year. That is just for Maryland. 

I would also note with the ARRA funding, Maryland received 

about $120 million, for which we are extremely grateful. We received $3.4 billion of requests for that funding. 

Mrs. NAPOLITANO. Mr. Walsh. 

Mr. WALSH. I can’t really speak to absolute numbers in terms of 

the gap nationally. I can talk a little bit about what goes on in 

Massachusetts and give you an example of one community in Massachusetts. 

In Bedford, which just finished upgrading its wastewater treatment plant and is making major investments in its combined sewer 

overflow facilities, the debt service on those projects alone has 

brought New Bedford to the point where it has exceeded the 2 percent of median household income level that the EPA uses as an indication of affordability. So there is New Bedford which is already 

well above the affordability level, and I suspect there are a number 

of other communities across the country that are in that situation. 

Without the help of the Federal Government, it would be very difficult for those communities, I think, to afford further improvements to their infrastructure. 

Interestingly, also in the case of New Bedford, the reason that 

the EPA has decided to impose new stringent standards on them 

for treatment and is going to require them to go to nitrogen removal, the nitrogen removal is there because of issues in downstream areas such as Buzzards Bay and Narragansett Bay, which 

are national water resources, not just Massachusetts water resources. So I think what we are doing is we are trying to protect 

resources that are national in scope. 

That also applies to my utility. Most of the reason that I have 

more stringent effluent standards is to meet water quality requirements in the State of Rhode Island and in Narragansett Bay. 

25 

So we have a very broad national scope in what we do and we 

have broad national need. 

Mrs. NAPOLITANO. Thank you, sir. 

Ms. Glance. 

Ms. GLANCE. Yes. New York has overwhelming needs, $38 billion in wastewater—$38 billion in drinking water over the next 20 

years, $36 billion in wastewater over the next 20 years. 

I had the privilege of standing with EPA Administrator Jackson, 

Governor Paterson, Congressman Hinchey and Congressman Tonko 

to announce EPA’s largest wastewater infrastructure grant in history around Earth Day, $432 million from the stimulus funds. 

Thank you very much for that. 

Those projects—that funding, we were able to leverage that. We almost doubled it to over $700 million in New York. We still have 

hundreds of reviewed, ranked, and ready-to-go projects that still 

await funding. So we can get these projects out the door if we have 

the funding. 

I do want to speak to the economic benefits, too. The Brookings Institution took a look at a $26 billion Federal investment in just 

the Great Lakes region alone; and the vast majority of that price 

tag is tied up, dealing with CSOs, and found that $80 billion in economic benefits we would gain from that $26 billion up-front investment. We think that is a pretty good rate of return. And we need 

additional funding. 

New York State provides some funding in our State budget for 

wastewater infrastructure. We leverage our SRF as much as possible. There is funding from the local municipalities, but there is 

a clear role for the Federal Government. We have many shared waterways. 

Mrs. NAPOLITANO. Thank you. 

Ms. Young. 

Ms. YOUNG. I can speak particularly on the contractors’ level, 

and in the Midwest where I work, we regularly have communities 

under boil orders because their water systems have become contaminated. We regularly have problems where old water mains 

break, streets open up, sinkholes. 

Mrs. NAPOLITANO. You hold the thought. 

But how do they get the ability those entities to address those 

contaminations without funding? 

Ms. YOUNG. Well, I think many of them don’t address it until 

they have a catastrophe, and then they call construction companies 

to come out on the weekend and make emergency repairs. And it 

seems as though, in the municipalities that we are involved with, 

it is like they don’t have the money until they are just forced to 

fix it and they need to fix it. 

The money—the contractors are ready and waiting to help with 

this, and what is really frustrating is to see municipalities put 

projects out and literally let us bid them, and then they don’t have 

the funding to support them and the job just sits there and nothing 

gets done. 

Mrs. NAPOLITANO. Mr. Hillman. 

Mr. HILLMAN. I testified as to our gap numbers already. I didn’t 

talk about why the gap exists, and you begged that question in 

your last question. And I don’t mean to be flip in saying it, but the 

26 

biggest part of the reason for the gap is because the American public is seemingly unwilling to pay for what they want. 

We need an attitude adjustment. We need to change the definition of needs and have lower quality or step up to the plate in some 

way through a trust fund or other accommodations and belt a 

homer. 

Mrs. NAPOLITANO. Thank you. 

I beg to differ, though, because the American public doesn’t know 

where to go to complain, one. Two, they don’t know what is involved and many of these—the water agencies, the cities—are informed and educated; the general public is not. 

If you phrase it the right way, they will agree. 

Mr. HILLMAN. Part of the problem is, it is unlike, for example, 

transportation infrastructure. Ours is more out of sight, out of 

mind. It just is. 

Now, we try to fight that. We put out a blog every day. We started last year. And I bring this up because I asked for some staff— 

we are going to do a daily blog, and all the catastrophes with sinkholes and collapsed infrastructure, do it once every 2 weeks. Two 

days later, you had better make it once a week; we have got 

enough stories already. Within 2 weeks we are doing it every day, 

but people still don’t know. 

Mrs. NAPOLITANO. But there should be an education component 

for the general public to understand. They will support it if they 

understand it—and if it is dedicated funding. 

Mr. Jacobson. 

Mr. JACOBSON. I will address your question both from a macro 

and micro perspective. As I know—and I have been in this business 

from about the time the Clean Water Act was passed in 1972, and 

through the years the EPA has generated their needs survey on 

both water and wastewater infrastructure. 

They don’t do this by divining it from Washington. They work 

with the State regulatory agencies, and those regulatory agencies, 

in turn, work with the cities and the counties and the agencies in 

their State to determine the needs. 

So I believe that the needs surveys that have been generated periodically by the EPA are quite accurate and very reflective of the 

needs of the water and wastewater infrastructure. 

To answer from a micro perspective, my hometown is Omaha, 

and as has been noted by some other people, the combined sewer 

overflow is quite an issue. In Omaha, we have a $1.5 billion tab 

facing us for combined sewer overflow treatment or mitigation, and 

that doesn’t address any of the other needs of the wastewater system within the community, whether it is within the collection system or the treatment system. 

So the need for a trust fund to help assist in such a funding 

mechanism is definitely something that we believe is necessary. 

Mrs. NAPOLITANO. Thank you very much for your testimony. It 

was enlightening. 

Mr. Boozman. 

Mr. BOOZMAN. Thank you, Madam Chair. I would like to kind of 

get back into the GAO report a little bit. 

GAO found that stakeholders identified three main issues that 

would need to be addressed in designing and establishing a Clean 

27 

Water Trust Fund, namely, how the trust fund should be administered and used, what type of financial assistance should be provided, and what activity should be eligible to receive funding from 

the trust fund. 

How would you recommend that each of these issues be addressed? Mr. Walsh? 

Mr. WALSH. I don’t know that I could tell you how I think the 

trust fund should be administered, say, from the top, but I think 

that there is a tremendous mechanism that is already in place that 

has worked very well in distributing funds for wastewater treatment systems, and that is the State revolving loan fund operation. 

Mr. WALSH. That is basically the same operation that was distributing funds during the construction grants stage. That program 

worked tremendously towards bringing our wastewater infrastructure up to the level that it is today. So I think that there is quite 

a bit of the administrative capability is there to run that sort of 

a fund. 

Mr. BOOZMAN. And the type of financial assistance? 

Mr. WALSH. You are saying, should it be a grant? Should it be 

a loan? Is that the question? 

Mr. BOOZMAN. Well, Mr. Summers is talking about having a fund 

that is really designed to reduce nutrients in a sense. We have 

other problems with aging pipes and infrastructure. I guess what 

I want to know is, if we have this trust fund, Mr. Blumenauer, in 

his testimony, talked about the fact that we are getting small, very 

minute quantities of drugs. That is very, very expensive to take 

out. So, again, I guess if we had this infrastructure fund, what are 

we talking about using it for? 

Mr. WALSH. I think that there are sufficient needs in terms of 

more stringent standards that are coming along, such as nutrient 

removal, such as better management, combined sewers, such as 

better management of sanitary sewer overflows, all of which are 

sort of new Federal mandates that the funds could be targeted for. 

I think local municipalities, local communities are capable of 

managing the maintenance of their systems, have been managing 

the maintenance of their systems. Frankly, I think they would 

manage the maintenance of their systems a lot better if these Federal mandates were funded better. 

I think many of us do tend to reduce the money that we spend 

on maintenance in order to spend money meeting the more stringent standards that are coming at us. So I think if we got relief 

on the newer mandates that would help us tremendously in being 

able to keep our systems in much better condition. 

Mr. BOOZMAN. Thank you, Mr. Walsh. And whoever else would 

like to comment is fine. 

Ms. Glance. 

Ms. GLANCE. I think using the existing mechanisms through the 

SRF managers is a very good system. It is already set up. I do 

think that with establishing a trust fund that transparency and the 

public understands exactly where that money is going is going to 

be incredibly important to maintain public support. And I think 

that a diffuse funding source, the more funding sources that we can 

tap to help build the solid trust fund I think the more solid it is 

going to be. And I think pollution prevention activities are so much 

28 

more cost effective. If we can prevent that pollution before we have 

to deal with it, it is going to be a lot cheaper in the long run. 

So we do need to have a holistic look at managing water where 

it falls and before it goes to the treatment plant so that we can 

stay on top of this and reduce our overall costs. 

And one of the things I do really like about this legislation is it 

deals with both drinking water and wastewater. This is our water 

infrastructure, and we need to look at them holistically together. 

Mr. BOOZMAN. Ms. Young. 

Ms. YOUNG. I would agree that you have three basic elements 

with water: You have the treatment, you have the rehab of existing 

systems, and then replacement or adding new systems to accommodate growing populations in certain areas. 

Education is real important for not only, like she said, how the 

water is handled before it gets to the treatment. AGC did that with 

liquid assets. We had people say, we didn’t know that stuff. 

And I think the funding, the formulas are in place in most States 

to handle this. They just don’t have enough money. And if they had 

money, it is like any business or any homeowner or individual. It 

is those capital improvements. They don’t have the money to do it. 

Mr. BOOZMAN. Since you bring that up, some of you have quoted 

Mr. Luntz on his opinion polls and things. The reality, though, is 

that, despite the surveys, despite what he says, it is really very, 

very difficult to raise utility rates, to get people to pay for the 

wastewater programs that we have. 

You gave us your views, Mr. Hillman. Does anybody else want 

to comment on that? I mean, like you said, it is one thing to—it 

is kind of like bus mass transit. Everybody loves it, but they want 

their neighbor to ride it versus themselves. 

Mr. Summers. 

Mr. SUMMERS. I would say that it is definitely true that there is 

a big resistance to raising rates, but in the case of Maryland, where 

we have invested a lot of time and effort in educating the public 

regarding the need for Bay restoration, I mentioned Governor 

O’Malley’s BayStat Web page that gives a transparent, easily understandable accountability mechanism. There really is very broad 

support. I am not going to say there aren’t people who object, certainly, but there is broad support. 

I live in Baltimore City. Baltimore City is subject to a judicial 

Federal consent decree, and we are spending over $1 billion on 

SSO problems in the city. My rates have been going up steadily. 

And the Mayor just raised rates again this year, and really there 

was not the kind of outcry you might expect. People, when they 

really understand what is going on, they are supportive. 

Mr. BOOZMAN. Let me just ask one more thing—and, again, Dr. 

Summers, you are alluding to it. Is it possible for municipalities to 

become self-sustaining without full cost pricing? Now, you mentioned Baltimore, and I don’t know the particulars of that, but evidently, because they had resisted increasing rates, they got themselves in trouble. And then you have this crisis, and then everybody understands that if you don’t get this done, then the Feds, 

through the Justice Department, step in and everything else. But 

is it possible to do that without full cost pricing? 

29 

Mr. SUMMERS. Well, in our case, we are doing it with a combination of grant funds through the State, the different programs that 

I have mentioned. The State is putting hundreds of millions of dollars into this problem already. The Federal SRF, as has been mentioned, has been going down, but it has been a major part of our 

effort. 

But there definitely needs to be also an increase in rates, and we 

are seeing that across the State rates are going up. We are doing 

more and more comparison and education of rates. And so I really 

do think that it is a multi-phased solution here. We are not going 

to do it based on the trust fund alone. It is definitely going to have 

a major rate component to it. But I think there are Federal mandates, and the Feds have a role in helping deal with the problem. 

So it has got to be a joint effort. 

Mr. BOOZMAN. I need to yield back so we can go to Ms. Edwards, 

but I agree. The unfunded mandate aspect of this thing can be a 

huge problem. 

I yield back, Madam Chairman. Thank you. 

Mrs. NAPOLITANO. Ms. Edwards. 

Ms. EDWARDS. Thank you, Madam Chairman; and thank you, 

also, Mr. Boozman, for your inquiry. 

My question is first to Dr. Summers—and it is always good to 

greet someone from the great State of Maryland. But I think that 

what Maryland has done is really instructive for us about how you 

can really engage the public with a broad public commitment to 

clean water, to a clean and healthy Chesapeake Bay, and then people are willing to invest in it. 

I live in the metropolitan area here just outside of Washington. 

And you would think you wouldn’t be able to make a connection 

between the people who live in the immediate D.C. suburbs to the 

Bay, and yet people have an incredible connection to the Bay. They 

understand that what we do in the Potomac River has an impact 

on the Chesapeake Bay. We have embraced that, and we are willing to pay for it. So I don’t actually buy the argument that people 

are not willing to pay for clean water, for healthy rivers. 

And because I was sitting here playing with my BlackBerry, I 

pulled up BayStat because I go to it often. And I looked and I noticed that many of the rivers that are tributaries into the Bay have 

a D, D plus, F rating. These are rivers that I fished in for 20-something years. And so it just highlights—I think a tool like this for 

consumers, for average citizens that is easily accessible and useable 

highlights for us what our responsibility is to our water and our 

water supply and engages us in the debate about the need to pay 

for it. 

And so I want to ask you, Dr. Summers, there is a tension I 

think between the opposition in some sectors to water use and 

funding a national water infrastructure initiative. And I wonder if 

you have specific recommendations of how you engage the public 

and create a sense of national support for infrastructure investment in the way that you have experienced in Maryland. 

Mr. SUMMERS. Well, I think that is where the partnership that 

we have been talking about comes from. Each region of the country 

has a water problem of some sort or the other; and I think by having the Federal Government actively involved, providing the techVerDate Aug 31 2005 10:59 Jul 26, 2010 Jkt 000000 PO 00000 Frm 00045 Fmt 6633 Sfmt 6633 P:\DOCS\51016.0 KAYLA
30 

nical and financial support to the State organizations, which in 

turn work with our local governments, it has got to be a joint educational effort. 

The EPA has wonderful information on their Web page, which 

we use for educational opportunities. The interlinking these days 

with the worldwide Web—you were just looking at BayStat. One of 

the things we tried to do with BayStat is tie that in to other 

sources of information to help educate the public. 

So I think the interconnection amongst the various organizations—and I should also mention our nongovernmental organizations, Chesapeake Bay Foundation and the Riverkeepers and others, have really helped with the educational effort as well. 

So it has really got to be multi-pronged. The legislation, No Child 

Left Inside, has been something that I think Congressman Sarbanes has been working on; and the education of the youth is something that is absolutely critical. 

Ms. EDWARDS. In any case, I think that what you have highlighted is that it really takes a full-scale engagement. And this has 

been leadership that has cut across Republican and Democratic administrations in the State of Maryland; and I think that is instructive, too. 

I want to go on to a question to Ms. Mittal, and it has to do with 

your written testimony. I looked through it, and I culled out a 

quote, and I want you to clear up what I thought was a little bit 

of confusion. 

On page four of your testimony, you mention that, while past 

proposals for funding a Clean Water Trust Fund have identified 

these products—referring to certain beverages, fertilizers, pesticides, et cetera—as contributing to the wastewater stream, limited research has been done on their specific impact on wastewater 

infrastructure, according to EPA. 

And then on page seven of your testimony you say that, in addition, industry groups who are consistently opposed to attacks on 

their specific product groups to support a Clean Water Trust Fund, 

in their view their products did not contribute significantly to the 

deterioration of wastewater infrastructure and therefore should not 

be taxed. 

And I just want to make sure that you are not suggesting that 

the only reason that one should be identified—or an industry or a 

sector should be identified to contribute to clean water has to do 

with the deterioration of the infrastructure and that that has to be 

the only logical linkage in terms of identifying funding. Because 

that would be very problematic. I think we heard earlier testimony 

from Mr. Blumenauer that, in fact, we need to sort of spread the 

responsibility across multiple arenas and sectors to come up with 

the amount of money, the billions and billions that we need. So I 

just want to make sure that that is not what you were saying in 

your testimony. 

Ms. MITTAL. Not at all. What we were saying was that there is 

no empirical data currently available that directly links some of 

these products to the wastewater infrastructure system. So although there is a general recognition that they do contribute to the 

wastewater infrastructure issues that we are dealing with, there is 

no good, solid, empirical evidence that says this is the exact impact 

31 

that a particular product or pesticide or whatever has on the 

wastewater infrastructure system. So that is one thing. 

The other thing that I wanted to emphasize is we asked the 

stakeholders that we questioned about the linkages between some 

of these options that we identified and where there is a stronger 

linkage between the wastewater system and these products we 

found a much greater level of support for the tax. So nobody is 

going to step up to the plate and say, yes, tax my products, but 

where they see that linkage between the wastewater system and 

their product, they are much more willing to support the idea of 

a tax. 

Ms. EDWARDS. I just want to conclude here. I think it is certainly 

the opinion of this Member that if we were only looking at sectors 

that had an identifiable impact on deterioration, one, it would be 

very limited and, two, there are consumers like me who would say, 

well, heck, I don’t fish, so why should I contribute to cleaning up 

the Bay or river? Or I don’t produce as much waste as my neighbor 

does, and so why should I have to contribute more? I think if we 

go down that route, we run the risk that we will never be able to 

fund the Nation’s water infrastructure needs. 

We have significant gaps, and so, at the very least, the Federal 

Government, I think, ought to be a partner in closing that gap so 

that then local responsibility and State responsibility can take over 

in the way that it needs to and fund things annually so that we 

don’t run the risk 20 years from now that we have an even greater 

gap. 

And I will yield. Well, I don’t have anything to yield, but I will 

just be quiet. 

Thank you, Madam Chair. 

Mrs. NAPOLITANO. Ms. Edwards, if you need to continue, there is 

only us up here. If you feel compelled to continue—— 

Okay. You give up. Thanks. 

The question for Ms. Mittal, in your testimony you suggest that 

there are challenges that need to be overcome for the creation of 

a Clean Water Trust Fund. Do you believe there would also be 

challenges to enactment of any other measure, whether a CSRS, for 

increasing the funding levels for wastewater infrastructure? 

For example, would there be a challenge to the concept of lifting 

the cap on productivity bonds, on creation of a national infrastructure bank? I mean, all of them would have challenges. So, because 

of that, all increases in water infrastructure would face legislative 

scrutiny and challenges, as you well know, but the challenge is in 

creating a trust fund surplus to those increases. How would that 

be able to be the best plan? What would be, in your estimation? 

More challenges? Less challenges? 

Ms. MITTAL. We haven’t actually done the comparison. All of 

those things that you identified were options that we identified 

during the course of our review, and we currently have a review 

ongoing for Congressman Mica where we are looking at the challenges that some of those other funding mechanisms could pose. 

So in about 4 or 5 months we will have a much better sense of 

what some of the positives and what some of the negatives are with 

applying some of those other alternatives for raising funding. At 

that point in time, we would definitely be able to look across all 

32 

of the funding options and give you a better sense of which ones 

would pose greater challenges. 

Mrs. NAPOLITANO. I specifically request that this Subcommittee 

be given that update if and when it comes. I appreciate it. Because 

that would be enlightening insofar as the different options and 

their challenges. 

Ms. MITTAL. We would be happy to. 

Mrs. NAPOLITANO. Thank you, ma’am. 

Mr. Hillman, in what ways does the lack of available financial 

resources to construct clean water infrastructure hurt the Nation 

economically? What economic benefits can be realized from the investment in water infrastructure? How would the creation of a 

Clean Water Trust Fund increase those benefits? 

Mr. HILLMAN. To follow up on my earlier comments, I think this 

gap does represent a huge lost opportunity to allow the economy 

to flourish. Comparing it to, for example, the creation of the Highway Trust Fund in ‘56, once you have created that, you have not 

only brought the country together, but the economy grew massively 

for half a century because of it. I think you can unleash the same 

type of results here. 

For example, in many communities where there is dilapidated infrastructure—and often it is because it is just old. It is nobody’s 

fault. It is just old. And everyone should have some skin in the 

game. And they should. Because, often, upgrading that infrastructure, replacing it, is literally a precondition for a growing economy. 

I will give you what I think is a good example, but I am winging 

it a little bit here. Driving to work yesterday on Arlington Boulevard in Arlington to our office—and I would notice something like 

this—there is a utility contractor starting a job. I like to know who 

it is, are they pay-induced, and I couldn’t see. But you have 

flaggers on Arlington Boulevard for safety. You have a gal watching the swing radius on a backhoe unloading relatively large diameter pipe on the side of the road. You have a couple of engineers 

with blueprints unrolled on their SUV. They are starting the job. 

And during that job you are going to create all of these results in 

here that are enumerated. I won’t repeat them. 

But the minute that job is over, the sudden impact is over. But 

what happens is—and I have to do this by illustration because 

quantifying it is very difficult to do—for most of the life expectancy 

of that new infrastructure you are constantly adding on new 

things. In fact, I can pretty much guarantee that job is designed 

for redevelopment. For the next 5, 10, 15 years, they are going to 

be knocking down these vacant buildings; they are probably going 

to be putting in housing units, entertainment, recreation, medical 

care, who knows what. 

And every time you do that it takes place because of the investment you are making now. If you don’t make the investment now, 

if you don’t close the gap, you don’t get any of that. 

Mrs. NAPOLITANO. Thank you, sir. That is very well put. But I 

would go even further than saying the contractor is creating those 

jobs. I would go to the laundry, food service, transportation. I 

mean, the list goes on. It creates a domino effect. 

Mr. HILLMAN. It is. And I am really glad you corrected me on 

that, because I forgot something. On page 10 of this, there is a 

33 

graphic that illustrates—this is the short-term only—it summarizes 

some of the induced—not the direct and indirect jobs but the jobs 

that are induced by the creation of the infrastructure. 

And I am very proud of this, first of all, because it was my idea 

to put it in, but, more importantly, what it does is it really illustrates this induced multiplier effect. What this chart does is it lists 

out of those 20,000 jobs created, it just shows you the breadth of 

the employment. Actually, $1 billion creates jobs in 325 different 

employment categories. It is virtually everything in the economy. 

Unless your job classification is hermit, you are going to get some 

impact from this. 

And when we have the story line in here, ′′everything in here 

from tires to tortillas′′, we are not being smart. It is actually true. 

And I don’t have it today, but if you go out 325 industries, it makes sense. You put $1 billion in something, you are going to be 

buying enough stuff that a plant is going to put somebody else on 

the tire line. 

Mrs. NAPOLITANO. Thank you, Mr. Hillman. And, yes, that is 

very, very true. 

Thank you for being so patient, to the panel, for sticking with us 

while we had to go vote. If you have any additional testimony, 

please submit it to this Subcommittee. The record is being kept 

open for 10 business days. Based on the input of the testimony 

given, if you have any additional points to submit, please do so. 

We thank you very much, and this hearing is adjourned. 

[Whereupon, at 5:10 p.m., the Subcommittee was adjourned.] 

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