December 2008: Feature Story

The 110th Congress adjourned in November following a brief lame duck session that was originally intended to consider a new economic stimulus package but fell victim to the latest industry bailout — this time for the “Big Three” automakers. Nonetheless, the 110th saw considerable debate and real progress on some issues, including NUCA’s efforts to make increased investment in water infrastructure a higher priority on Capitol Hill.

After the results of the historic 2008 election were in, the Democrats had not only significantly increased their majorities in the House and Senate, but also taken back the White House with the election of the first African-American president in the nation’s history. When all was said and done, it became very clear that the Democrats’ agenda would continue into 2009 — when virtually all legislative gains and losses will be owned by the Democrats at the helm of the 111th Congress.

Infrastructure Investment Gets Some Respect

NUCA prides itself on taking the lead in a wide variety of legislative efforts to increase investment in our environmental infrastructure, and the 110th Congress provided ample opportunities to make our case.

EPA’s State Revolving Fund (SRF) Programs

NUCA hit the ground running at the outset of the 110th, when the House Transportation and Infrastructure (T&I) Committee held an early hearing on the need to reinvest in our environmental infrastructure. Then NUCA President Jim Stutler of Colorado testified before the committee about what he and fellow utility construction contractors see on the job every day when repairing dilapidated water and sewer systems. Stutler encouraged T&I Committee Chairman Jim Oberstar (D-Minn.), a longtime champion of clean water initiatives, to expeditiously move legislation that would reauthorize the Clean Water SRF, and the Chairman didn’t disappoint. Within weeks, the committee approved the Water Infrastructure Financing Act (HR 720), which would authorize $14 billion for the Clean Water SRF over four years. And by the end of March 2007, the legislation was passed by the House by an overwhelming margin.

Unfortunately, the Senate Environment and Public Works (EPW) Committee dragged its feet for well over a year and effectively dropped the ball on SRF reauthorization. Because of the committee’s focus on legislation addressing global climate change, the Senate SRF bill (S 3500) was not introduced until September 2008. The legislation, which would have authorized more than $38 billion for water and wastewater infrastructure (specifically $20 billion for the Clean Water SRF, $15 billion for the Drinking Water SRF and more than $3 billion for combined sewer overflow projects), passed easily through the EPW Committee once it was finally considered. Unfortunately, the committee’s action came too late in the second session of the 110th, and SRF reauthorization was again unable to reach the finish line.

NUCA recognizes and shares the frustration that comes with working this legislation for many years, and despite significant progress, seeing another SRF reauthorization bill stall. However, it is important to note that the 110th Congress marks the most progress made on the legislation in recent memory. Achieving passage of an SRF bill in the House and similar legislation passed through the Senate EPW Committee is indeed significant. NUCA looks forward to moving a reauthorization bill through the House and Senate early next year.

NUCA President Terry Dillon testified three out of the five times NUCA testified to Congress in the past year.

As NUCA has indicated for many years, the lack of SRF reauthorization has opened the door for the recent cuts in annual appropriations to the program. Despite NUCA’s success in restoring $689 million and $829 million for the Clean Water and Drinking Water SRF programs (respectively), the final budget of the Bush White House stuck it to clean water again, this time proposing to cut clean water funding to $555 million in fiscal year 2009. No matter how you voted this past election, clearly the utility construction industry looks forward to a change in White House policy regarding water infrastructure funding.

Keep in mind that despite the continued cuts in water funding under the Bush budget, every year NUCA has successfully restored as much funding as possible. Months ago, Senate Majority Leader Harry Reid (D-Nev.) put an end to this year’s appropriations game and essentially punted the vast majority of next year’s spending bills to the early part of next year, where a new administration and Congress will most likely mean good things for annual funding for clean water infrastructure improvements.

Blumenauer Spotlights Importance of Infrastructure

From the beginning of the 110th Congress, Rep. Earl Blumenauer (D-Ore.) made it his mission to elevate the issue of infrastructure investment on the congressional priority list. He started by holding roundtable discussions with a small handful of organizations about the establishment of a water infrastructure trust fund. As attention on the problems facing our nation’s infrastructure increased, early participants like NUCA watched as these discussions grew in attendance and interest. This summer, the meetings had grown large enough to warrant holding them in the U.S. Library of Congress and hundreds attended.

Additionally, Blumenauer was able to get House Speaker Nancy Pelosi (D-Calif.) engaged in the issue. “When it comes to creating jobs, revitalizing our economy and addressing global warming, we must have the right resources and infrastructure to address these needs,” the Speaker said. “I am proud to join with Congressman Blumenauer and all those working to implement a new vision that will help us meet the challenges of the 21st Century.”

Blumenauer’s National Plan consists of a multi-tiered approach that includes:

• introducing the U.S. Commission on Rebuilding America for the 21st Century Act (HR 5976), which would create a new national commission to identify current and future challenges, hold public hearings on infrastructure and articulate a national vision for infrastructure investments, including specific recommendations for improvement;
• addressing global climate change by evaluating transportation alternatives through advanced technologies to reduce auto emissions, as well as grants and tax credits to communities that improve design and offer alternatives to reduce travel demand; and
• establishing a water infrastructure trust fund to provide a deficit-neutral, consistent and fire-walled source of revenue to states to support the replacement, repair and rehabilitation of clean and drinking water infrastructure.

NUCA will continue to work with Rep. Blumenauer and fellow industry organizations as the development of this long-overdue effort continues. With regard to the important question of “how do we pay for it,” NUCA believes policy that shifts the costs to one or a handful of companies is not viable.

Now 34 national and international construction organizations strong, the CWC advocates a broad range of water infrastructure issues, from appropriations to reauthorization bills to the establishment of a national infrastructure bank

A true user-fee to pay for this trust fund should be considered — one that is paid for by all Americans. Interest in the trust fund issue will no doubt grow significantly on and off Capitol Hill in the 111th Congress, and NUCA looks forward to the debate.

Interest Remains in Private Investment Opportunities

NUCA continues to encourage lawmakers and other government officials to think outside the box and remain open to considering any and all viable sources of revenue for environmental infrastructure projects. Recent years have seen increased interest from the private sector in opportunities to invest in the water infrastructure market.

Recognizing the existing, documented $200 billion need on the wastewater side alone, NUCA has supported legislation that would increase opportunities for private money to enter the market.

Most recently, NUCA supported legislation (HR 6194) introduced by Rep. Bill Pascrell (D-N.J.) that would bring water and wastewater projects out from under the volume cap on private activity bonds (PABs). These bonds allow private entities to partner with state or municipal governments to receive tax-exempt financing for projects that are in the interest of the general public, but are currently subject to a limited dollar amount, or “cap.” The Pascrell bill would eliminate the cap on water/sewer projects and increase the likelihood of private entities engaging in underground infrastructure improvements. Currently water/sewer projects are overlooked by the private sector in lieu of road, highway, school and other, more visible projects.

The Pascrell bill was referred to the House Ways & Means Committee, but no action was taken on it. NUCA expects the legislation to be introduced again in the 111th, although, because Democrats have traditionally been hesitant to support any type of privatization of American public works, the prospects for substantive progress are uncertain at best.

Heavy Hitters Join CWC

For almost two decades, NUCA has served as chair of the Clean Water Council (CWC), a coalition of national organizations representing underground utility construction contractors, design professionals, manufacturers and suppliers, labor representatives and other organizations committed to ensuring a high quality of life through sound environmental infrastructure. The CWC advocates a broad range of water infrastructure issues, from appropriations to reauthorization bills to the establishment of a national infrastructure bank. Now 34 national and international construction organizations strong, the CWC will be fully engaged in next year’s water trust fund debate, and the coalition continues to grow its membership to enhance its influence.

During the 110th Congress, the CWC was joined by the following high-profile organizations: Laborers’ International Union of North America, Water and Sewer Distributors of America, Plastics Pipe Institute, International Union of Operating Engineers and the Ductile Iron Pipe Research Association.

The addition of these heavy hitters to the CWC will be instrumental in pushing water infrastructure bills in the 111th, and we welcome them with open arms.

NUCA Testifies Five Times During the 110th Congress

NUCA is proud of the fact that we are considered the go-to organization when Congress wants to hear about water infrastructure issues related to the construction industry. The 110th broke all recent records in terms of our appearances before Congressional committees. Here is a brief summary of appearances over the past two years.

• January 2007: NUCA President Jim Stutler appeared before the House Water Resources Subcommittee to discuss America’s water infrastructure needs and to encourage the introduction of SRF reauthorization legislation.
• October 2007: NUCA President James King testified before the full House Transportation and Infrastructure Committee to celebrate the 35th Anniversary of the Clean Water Act. NUCA was the only construction organization invited to testify.
• March 2008: NUCA President Terry Dillon testified before the House Financial Services Committee to describe the downstream impacts of municipal bond market turmoil on water and wastewater infrastructure projects.
• April 2008: Terry Dillon returned to the Hill to appear before the House Appropriations Subcommittee on Interior and Environment to encourage restoration of federal funding to the Clean Water SRF in fiscal year 2009.
• October 2008: Dillon testified before the House T&I Committee to make the case for inclusion of underground water infrastructure funding in future economic recovery legislation.
  

NUCA is proud to represent the utility construction industry when Congress wants a real-life perspective on water infrastructure legislation. We look forward to continuing to serve in this capacity next year and beyond.

HTF Gets a Fix but Challenges Remain

For the better part of this year, the price of gasoline was among the top priorities in Washington, and the ramification of rising gas prices took its toll on federal highway funding. In fact, it was clear early in the second session that the Highway Trust Fund (HTF) was facing a deficit because high gas prices resulted in lower HTF revenue, which comes primarily from the federal gas tax.

After the usual back and forth between infrastructure advocates and conservatives always looking to rein in spending, Congress was able to pass a legislative fix to the HTF deficit by transferring $8 billion from general revenues into the highway account. Supporters of the legislation justified the action as a reimbursement for surplus funds taken out of the HTF in 1998 in order to ensure that states would not be forced to cut highway improvement projects next year. Regardless of this year’s “band-aid” bill, the structure and operation of the HTF will be under the microscope next year when highway reauthorization is once again on the table.

Employer Verification Remains a Hot Button Issue

The issue of immigration reform was on the front burner for most of the first session of the 110th, and NUCA advocated for a policy that would not only secure America’s borders, but also permit undocumented individuals to stay in this country and work while going through background checks and meeting a broad range of requirements that would allow them to achieve legal resident status.

To elevate the issue of infrastructure, Rep. Earl Blumenauer (D-Ore., pictured speaking to NUCA members) held roundtable discussions with a small handful of organizations about the establishment of a water infrastructure trust fund.

While “comprehensive” immigration reform legislation unfortunately died in the first session of the 110th Congress, the issue of employee verification remained front and center in the debate. Facing considerable pressure from constituents to deal with our broken immigration system, scores of lawmakers turned up the heat on American businesses to better ensure that the workers they hire are here legally. Legislatively speaking, the path of least resistance turned out to be to make the E-Verify system mandatory rather than voluntary. E-Verify allows employers to use an Internet-based system to check federal Social Security and immigration databases and determine whether or not an employee is authorized to work. However, the system has significant flaws and is roundly criticized for error rates due to the government’s inability to keep the database up to date.

It is well known that political pressure sometimes eclipses common sense. A bill (HR 4088) that gained lots of support because it provided lawmakers political cover on the issue would have made use of E-Verify by virtually all American employers over a certain period of time. NUCA and several construction contractor groups quickly and strongly opposed the bill. In the end, despite lots of heated debate, HR 4088 (thankfully) died on the vine.

Unfortunately, the Bush Administration also pushed for mandatory use of E-Verify. Following an Executive Order mandating use of the system by federal contractors, several agencies that oversee federal contracts came out with new rules regarding E-Verify. In the end, the final rules mandate that after January 15, 2009, federal contractors must use the E-Verify system to verify all new hires and others “assigned to the contract” (not the company’s entire workforce). The final rule also raised the threshold for covered contracts from $3,000 to $100,000 and allows a contractor 90 calendar days to enroll in the system after a contract is awarded. (The proposed rule allowed only 30 days.)

Contractor Withholding Issue Still Looms

Lest you think it went away, the pending “contractor withholding” regulation is still out there. For background, a tax provision (Sec 511) was included at the eleventh hour in a 2006 tax bill; starting in 2011, it will require virtually all federal, state and local government agencies to withhold three percent of payments to organizations that provide products and services to them.

NUCA and the Government Withholding Relief Coalition made significant progress on legislation (HR 1023) that would repeal this awful provision from the tax code. However, despite the fact that we were able to garner an overwhelming 260 cosponsors on the bill, House leaders decided to table the entire issue until the 111th Congress. This was in large part because of next year’s anticipated “mother of all tax bills” promised by Rep. Charlie Rangel (D-N.Y.), Chairman of the House Ways and Means Committee. Chairman Rangel has made it clear that a broad range of tax issues will be included (and you will no doubt be hearing from us about many of them), and the strategy will likely be to use the broad support of HR 1023 as leverage to gain inclusion of language to repeal Sec. 511 in next year’s bill.

Outlook for 111th Congress

As we all know, the key buzzword in this election year (and well before) has been “change.” Well, rest assured, change is coming — some of it very good and some of it downright scary. If you thought the 110th Congress was different, get ready. Good things are coming to critical infrastructure markets, starting with early action on economic recovery legislation that includes significant resources for jobs to improve America’s underground environmental infrastructure. Additionally, NUCA and the CWC will be looking at the best chances in years for SRF reauthorization, as well as the likelihood of major progress on legislation to establish new funding sources for infrastructure.

That being said, there is substantial baggage that will have to be addressed. As mentioned above, NUCA is very concerned about what might be included in next year’s tax bill, but you can be sure we’ll be on top of it. Card check legislation will be back on the table. This bill would circumvent the democratic process by allowing a simple check card in lieu of the secret ballot process when decisions are made regarding employee unionization. It is also possible that there will be other labor issues that NUCA will have to contend with. And as always when the Democrats are firmly in control of Congress, new legislation, regulations and enforcement practices dealing with OSHA issues can be expected.

That’s why NUCA is here — to advance the issues that benefit the underground utility construction industry and to oppose the harmful ones. All we ask is that you continue to help us out. Associations are only as strong as the grassroots constituencies they represent. Now is not the time to stand on the sidelines. Your industry needs you in the game.

Eben Wyman is NUCA Vice President of Government Relations, Arlington, Va.