Legislative Update

Perspectives 

The first half of 2024 has continued to be a mixed bag on federal funding. On the one hand, the Bipartisan Infrastructure Law’s (BIL) influxes of funding to the State Revolving Funds continue to flow out of EPA to the states and are starting to truly hit the ground. On the other hand, annual funding levels – the base funding which the BIL was supposed to augment – remain stagnant and are facing new challenges.  

EPA’s budget proposals have done little to assuage concerns. Ahead of Congressional appropriators negotiating FY25 Interior-Environment Appropriations, the Biden Administration EPA budget proposal left much to be desired. Despite the slight funding increases touted by the Administration for the agency overall, the proposal reduces the amount of funds available for the Clean Water State Revolving Fund (CWSRF) by a staggering 25%. 

The CWSRF, an important cornerstone for funding water infrastructure projects, has seen its annual funding – aside from the Bipartisan Infrastructure Law influxes – remain stagnant for many years. While simply maintaining previous years’ funding levels might seem like a win for FY25 - the reality is much more bleak. 

The FY25 budget sets forth a new approach to calculating the SRFs which reflects the capitalization grant minus funding directed by Congress to Community Development Projects, otherwise known as earmarks.  Nearly 50% of the CWSRF’s budget is earmarked for community projects, which dilutes the available funds being revolved through state agencies administering the program. EPA’s budget approach masks the extent of cuts that state programs face.   

The practice of earmarking projects is not a new one. After a 10-year hiatus, Congress re-established the earmark process with an increased eye toward transparency and projects with clear public benefits. Water infrastructure earmarks have proven quite popular for lawmakers to secure. Earmarks can provide critical, rare grant dollars for utilities and communities. While this is a helpful development for hundreds of communities, we also firmly believe that Congress should not be pulling these earmark funds from the SRFs – their funding should be additive, reflective of the popularity and demand for these projects.  

Despite these challenges, NACWA is at the forefront of advocating for full and equitable funding for the CWSRF. NACWA has asserted that earmarks, while advantageous for communities securing them, have undermined the collective impact of the CWSRF and destabilized the reliability of CWSRF funds going forward. Therefore, in addition to urging full funding for the SRFs at the authorized amount of $3.25 billion in FY 2025, NACWA’s top priority is ensuring that funding for earmarks is on top of or entirely separate from baseline CWSRF allotments. We are urging Congress to act now, ahead of the looming drop-off in total SRF dollars which will come when the BIL funds run out after FY 2026.  

The recent release of the long-awaiting 2022 Clean Watershed Needs Survey Report identified an estimated $630.1 billion unfunded clean water investment needs over the next 20 years. The major increase in need this demonstrates helps make the case to Congress for increased investment.  As the FY25 appropriation cycle has now begun in earnest, NACWA continues to work with policymakers to push for a more substantial and equitable funding strategy for the CWSRF. Despite the political dynamics at play, NACWA remains nonetheless laser-focused on ensuring the long-term benefits of robust water infrastructure funding be shielded from unrelated political battles.  

While election years can be challenging on many fronts when it comes to federal funding and policy, NACWA members can take pride in knowing that the association is leading the charge in this critical flight and making progress on other legislative priorities. From advancing legislation to protect ratepayers from CERCLA PFAS liability,  to increasing support for standing up a permanent low-income water assistance program, and advancing the Wastewater Infrastructure Pollution Prevention and Environmental Safety (WIPPES) Act to the floor of the House of Representatives, NACWA has continued to make progress on a myriad of policy priorities in D.C.  

Looking ahead to the 2024 election year and FY25 funding cycle, NACWA is intensifying its efforts to secure the necessary funding and policy commitments from lawmakers. Through persistent advocacy, coalition building, and community outreach, NACWA has elevated the voice of the sector at one of the most critical times in recent history.  

Top Stories 

The U.S. Environmental Protection Agency (EPA) released its long-awaited 2022 Clean Watershed Needs Survey (CWNS) Report to Congress on May 14, identifying an estimated $630.1 billion in unfunded clean water investment needs. This represents an increase of 73 percent since the last CWNS was completed a decade ago in 2012. 

While a $91 billion water investment gap was identified by the Value of Water Coalition and American Society of Civil Engineers in another report released this week (see related story) that estimate reflects just the 2024 gap, whereas EPA’s report reflects the estimated gap over the next 20 years. 

EPA is required by statute to report periodically to Congress on the estimated clean water investment need in the United States. However, given the significant time that had elapsed since the last CWNS, NACWA worked hard to include language in the 2021 Bipartisan Infrastructure Law (BIL) directing EPA to complete an updated CWNS by November 2023 and every four years thereafter.   

Data for the current CWNS was collected from each state, the District of Columbia and U.S. territories between March 2022 and May 2023 and represents their estimate of need as of January 1, 2022. Data was collected by individual states based on information from their Clean Water State Revolving Fund (CWSRF) intended use plans and was forwarded to EPA. 

Overall, 55 percent of the total need identified in the survey is for investment in centralized wastewater treatment plants and collection systems, with 18 percent of the need coming from municipal stormwater. The remainder of the need is for work on non-point source controls, water reuse and decentralized wastewater systems. Not surprisingly, 88 percent of the need comes from urban areas and 12 percent from rural areas. 

The CWNS is one of the most cited figures for how much additional funding is needed to properly invest in clean water infrastructure. EPA acknowledges in the report that while the 2022 number is much higher than the 2012 number, it still likely underestimates the total investment need over the next two decades. 

NACWA put out a press release in response to the report, highlighting the continued importance of the federal government increasing its commitment to long-term water infrastructure investment. The Association plans to use the report to help advance its calls for additional federal clean water funding. 

Members with questions can contact Nathan Gardner-Andrews, NACWA’s Chief Advocacy & Policy Officer 

Final CERCLA PFAS Rule Hits Federal Register with Effective Date of July 8; Legislative Advocacy for Targeted Exemption Continues 

The U.S. Environmental Protection Agency (EPA) published its final rule designating PFOA and PFOS, including their salts and isomers, as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) in the Federal Register on May 8. This publication initiates a 60-day period until the rule goes into effect on Monday, July 8.   

Throughout the rulemaking process, NACWA has engaged in significant advocacy efforts around EPA's work to designate these two PFAS chemicals as hazardous substances under the federal Superfund law by submitting substantial comments on the issue and meeting with the White House's Office of Management and Budget to highlight EPA's failure to include the true costs of CERCLA liability on public clean water agencies and their customers.  

While the CERCLA rule will now take effect despite NACWA’s objections, the Association is continuing its strong advocacy on Capitol Hill to secure a targeted exemption for water sector utilities from CERCLA liability.   

The Water Coalition Against PFAS, which includes NACWA, the American Water Works Association (AWWA), the Association of Metropolitan Water Agencies (AMWA), the National Rural Water Association (NRWA), the Water Environment Federation (WEF), and the National Association of Water Companies (NAWC), remains actively engaged with Congress to address concerns related to PFAS and CERCLA liability.   

To date, the Coalition has held over 100 meetings with Congressional offices advocating for statutory protections that would protect water utilities from PFAS-related CERCLA liability.   

Coalition efforts have focused on advancing the "Water Systems PFAS Liability Protection Act" (S. 1430/HR 7944). Together with Coalition partners, NACWA urges Congress to use its authority to ensure the "polluter pays" model is followed, placing remediation costs on those who produced and profited from the chemicals. These efforts are bearing fruit, as the Senate recently held a hearing addressing liability concerns and there are ongoing congressional negotiations related to potential liability protections.   

NACWA sent members an Advocacy Alert in April with information on what utilities need to know about this action and links to available resources NACWA has developed. NACWA will be providing members with additional information and resources related to the CERCLA rule and its implications soon. In the meantime, members with questions can contact NACWA’s Government Affairs staff for more information.   

House Lawmakers Introduce Two Bills Further Advancing Water Sector Priorities on PFAS and Low-Income Assistance  

Members of the U.S. House of Representatives have introduced two bipartisan bills that help advance key NACWA and water sector priorities. NACWA and its association partners played key roles in moving these legislative initiatives forward.  

On April 11, Reps. John Curtis (R-UT) and Marie Gluesenkamp Perez (D-WA) introduced H.R. 7944, which is the House companion legislation to a bill introduced by Sen. Cynthia Lummis (R-WY) last year. As with the Senate legislation (S. 1430), H.R. 7944 would protect water and wastewater systems from financial liability under CERCLA related to the treatment and disposal of PFAS and PFAS-latent material. The now bicameral legislation aims to uphold CERCLA’s core principle of ensuring that polluters bear the costs of remediation.   

On April 16  H.R. 8032, the “Low-Income Household Water Assistance Program Establishment Act,” was introduced by Reps. Eric Sorenson (D-IL) and Lori Chavez-DeRemer (R-OR). As the companion bill to that introduced by Sen. Alex Padilla (D-CA) in the Senate, the legislation would incorporate low-income water assistance support into the federal social safety net by authorizing the Department of Health and Human Services’ Low-Income Household Water Assistance Program (LIHWAP). The legislation would make permanent the temporary COVID-era program that has since assisted over 1.6 million households.   

NACWA, together with our water sector partners, applauds these lawmakers for championing some of the sector’s top legislative priorities. As we work to advance these bills through Congress, please contact Danielle Cloutier, NACWA Director of Legislative Affairs, with any questions or to discuss further.   

Over 300 Attend 2024 National Water Policy Fly-In, Engage with Federal Policymakers at a Pivotal Moment 

Over 300 water sector leaders came to Washington, D.C. to advocate and engage on elevating water priorities during the 2024 National Water Policy Fly-In. 

On April 9, leadership from the U.S. Environmental Protection Agency (EPA) and the Bureau of Reclamation spoke at the Fly-In, as did key Congressional supporters for NACWA priorities including Sen. Shelley Moore Capito (R-WV), the Ranking Member of the Senate Environment and Public Works Committee, and Rep. Chris Pappas (D-NH), who is active on clean water issues for the House Transportation and Infrastructure Committee.   

Fly-In participants met with their Congressional representatives on Capitol Hill and networked with one another during the Water Week Reception, at which Fly-In attendees were joined by advocates from the drinking water and water equipment manufacturing sectors for an enjoyable evening along the riverfront at the headquarters of DC Water.   

Other highlights included political commentary and perspectives from former EPA Office of Water leadership now active in the environmental and state regulatory community.   

Thanks to everyone who joined us for the 2024 Fly-In – or engaged in other ways during Water Week! Mark your calendars for Water Week 2025, set for the week of April 7, 2025, to make your voice heard in D.C.!   

PFAS 

Water Coalition Testifies Before Senate About Importance of a PFAS CERCLA Exemption for Utilities

Michael Witt, a NACWA Board Member and General Counsel of member utility the Passaic Valley Sewerage Commission (PVSC), testified on March 20 before the Senate Environment and Public Works (EPW) Committee on behalf of the entire Water Coalition Against PFAS during a hearing entitled “Examining PFAS as a Hazardous Substance.”   

Witt’s testimony urged Congress to enact statutory protection for water systems under the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for PFAS. These protections will help ensure that the true polluters of PFAS cannot push CERCLA costs onto clean water and drinking water agencies and their customers.   

The hearing was critically important in highlighting how passive receivers, including water systems, face massive liability risks under CERCLA if PFAS are designated as hazardous substances. The Biden Administration recently released its final rule designating PFOA and PFOS under CERCLA which will take effect this July (see story above).  

Against this backdrop, NACWA has been working aggressively with partners across the water sector – including the Association of Metropolitan Water Agencies, the American Water Works Association, the National Association of Water Companies, the National Rural Water Association, and the Water Environment Federation – as part of the Water Coalition Against PFAS to elevate the issue and ensure united and sustained advocacy to Congress to protect water systems through a targeted shield from PFAS liability under CERCLA.   

Unfortunately, environmental activist groups have been aggressively campaigning against this type of protection for water systems. The Water Coalition Against PFAS strongly believes that opposition is based on an inaccurate understanding of how CERCLA plays out in the real world – and ironically, would protect polluters’ pockets by enabling them to rope water systems that passively receive PFAS into cleanup liability that should be borne by the chemical companies and others that profited off of PFAS production for decades.  

Witt’s testimony offered a clear example that the threat is real by discussing PVSC’s experience being targeted – along with dozens of other local governmental entities – by a corporate polluter seeking to escape liability for contamination along the Passaic River.   

NACWA was pleased with the substantive questioning by Members of Congress of various witnesses throughout the hearing. In particular, there was significant back and forth regarding EPA’s ability to protect water systems through its CERCLA enforcement discretion. That discussion arose because EPA has stated it does not intend to target passive receivers like water systems under CERCLA, and is working to develop an Enforcement Discretion policy.   

During the hearing, Witt and other witnesses were able to highlight the limits of such a policy – namely, that it does not carry the force of law, is subject to change by a future Administration, and that its impact is limited to claims brought by EPA – not private parties. This is a huge area of concern for utilities as under CERCLA, private parties can (and will, as PVSC’s example shows) look to draw passive receivers like water systems into lawsuits to share responsibility for cleanups that could reach into the billions of dollars. These are critical limitations of EPA’s Enforcement Discretion authority, which only Congress can address.   

The hearing attracted good press coverage from a variety of publications. A video recording of the hearing is available here. The Water Coalition Against PFAS released a press statement that can be viewed here.    

Other witnesses at the hearing included Robert Fox, a CERCLA attorney testifying on behalf of the National Waste and Recycling Association and the Solid Waste Association of North America. Mr. Fox has also worked on CERCLA cases on behalf of municipal governments, including New York City. Also testifying were Scott Faber from the Environmental Working Group; a representative from the Congressional Research Service; and Secretary of the New Mexico Department of Environment James Kenney.   

NACWA thanks PVSC for carrying the water sector banner at the hearing on this critical issue! Contact Kristina Surfus, NACWA Managing Director of Government Affairs, with any questions.  

Federal Funding 

The Senate Environment and Public Works Committee held a hearing May 8 on the U.S. EPA's proposed FY 2025 budget request. Administrator Michael Regan testified before the Committee.   

The President's budget request, released in March, called for a 24 percent cut to the Clean Water State Revolving Fund (CWSRF) from the FY 2024 enacted level. NACWA opposes this cut and continues to work with Congress to restore funding for the CWSRF to the full Congressionally authorized amount of over $3 billion while also advocating for Congressionally directed Community Project Funding, otherwise known as earmarks, to be funded from sources other than the CWSRF.  Read the full story in the Clean Water Current.   

For more information, please contact Matt McKenna, NACWA’s Director of Government Affairs.   

NACWA Supports Pledge to “Save the SRFs” 

NACWA and other leading water sector associations signed a new pledge calling upon Congress to fund the State Revolving Funds (SRFs) at congressionally authorized levels of $3.25 billion each for federal fiscal year 2025. 

The “Save the SRFs” initiative, spearheaded by the Council of Infrastructure Financing Authorities (CIFA), seeks to advocate for policy solutions that close the funding gaps between SRF authorizations and actual SRF appropriations. In FY 2024 alone, there was an $11.75 billion funding disparity between the SRF authorizations and the funding available for states to revolve. Read the full story in the Clean Water Current.  

Members with questions should contact Matt McKenna, NACWA’s Director of Government Affairs, for more information.   

President Releases Proposed FY 2025 Budget, Calls for Increase to EPA Budget but Cuts to CWSRF 

President Biden sent his FY 2025 budget request to Congress in March. While it calls for a more than 20 percent increase to the Environment Protection Agency’s (EPA) overall budget, the proposal reduces the amount of funds available for the Clean Water State Revolving Fund (CWSRF).  

The budget-in-brief document highlights the administration’s proposal of a combined “increase of $1 billion over the 2023 enacted level” for the Clean Water and Drinking Water State Revolving Funds (SRFs), but the proposal actually cuts the CWSRF by 24 percent from the FY 2023 enacted level. Read the full story in the Clean Water Current.  

Members with questions about the budget should contact Matt McKenna, NACWA’s Director of Government Affairs. 

Final FY 2024 Interior-Environment Appropriations Bill Provides Level Funding with Past Year 

Congressional Appropriators released the text and explanatory statements on March 4 for a handful of final federal fiscal year (FY) 2024 Appropriations bills, including the FY24 Interior, Environment, and Related Agencies appropriations bill. This is the bill that funds EPA. 

The $459 billion “minibus” contained six of the twelve FY24 appropriations bills. The federal government had been operating on a continuing resolution (CR) that was set to partially expire on March 8. Congress passed the final FY24 bill and sent it to President Biden’s desk for signature just before the midnight deadline on March 8. Read the full story in the Clean Water Current.  

Please contact NACWA’s Government Affairs team for the latest on Congressional appropriations activity. 

EPA, NACWA Discuss BABA Implementation Issues 

NACWA met with the EPA Office of Water’s domestic preference team on March 20 to discuss ongoing concerns being raised by clean water agencies related to Build America, Buy America (BABA) implementation. 

NACWA staff and clean water agency members outlined concerns related to how BABA compliance may reduce the appeal of the Clean Water State Revolving Fund (CWSRF) – including funds from the Bipartisan Infrastructure Law – for major capital projects which may have been planned many years in advance, such as consent decree investments. BABA has been waived for SRF projects that had initiated design planning before BABA’s effective date in May 2022, but only for projects funded in FY22 and FY23. Read the full story in the Clean Water Current.  

More information on BABA as it relates to federal clean water funding and the waiver process is available on EPA’s website. Contact Kristina Surfus to discuss further

NACWA Calls for Funding of Programs that Connect Americans to Clean Water Services 

With over two million Americans lacking basic access to clean water and proper sanitation, NACWA signed a letter to senior Congressional appropriators on February 22 calling for continued investments in the FY 2024 appropriations bills to provide Americans access to safe and clean water. 

The letter calls on Congress to fund the Department of Agriculture's (USDA) Rural decentralized Water Systems Grant program at $20 million and include $5 million for the Environmental Protection Agency's (EPA) grant program for the construction and refurbishing of household decentralized wastewater systems for low- and moderate-income households. NACWA joined 13 other organizations in signing the letter. Read the full story in the Clean Water Current.  

Members with questions should contact Matt McKenna, NACWA’s Director of Government Affairs.  

Cybersecurity 

Along with the Water Environment Federation (WEF), NACWA submitted written testimony to both committees, emphasizing the importance for Congress to leverage existing cyber resources better to help combat future attacks.   

Members with questions should contact Matt McKenna, NACWA’s Director of Government Affairs.   

NACWA Advocates on Capitol Hill for Increased Cybersecurity Resources for the Clean Water Sector 

NACWA’s government affairs team continues to advocate on Capitol Hill for increased resources for public clean water utilities to address cybersecurity threats in the water sector. With recent cyber-attacks on water utilities garnering media attention, including an attack by an Iranian-backed cyber group known as CyberAv3ngers on the Municipal Water Authority of Aliquippa in western Pennsylvania, NACWA has highlighted to key Congressional leaders the need for increased federal tools for water utilities to better combat cyber threats.   

NACWA supports the passage of S.660/H.R.1367, the Water System Threat Preparedness and Resilience Act, which provides federal resources and tools to the WaterISAC to expand membership and further assist drinking water and clean water utilities to better prepare for and mitigate against cyber security and other growing threats and risks. The bill is championed by Senator Edward Markey (D-MA) and Representative Jan Schakowsky (D-IL). Read the full story in the Clean Water Current.  

NACWA’s government affairs team will continue to work with Congressional offices to find legislative opportunities to address cybersecurity issues facing the clean water sector.  

LIHWAP 

Timed with World Water Day, on March 21 the U.S. Department of Health and Human Services (HHS), Office of Community Services – which administers the temporary Low Income Household Water Assistance Program (LIHWAP) – released its  LIHWAP Water Utility Affordability Survey Report. The survey collected information from water and wastewater utilities across the United States about arrears, disconnections, fees, rates, and more. HHS received more than 1,800 responses to its survey from a diverse set of respondents including many NACWA members. 

This survey helps fill a gap in knowledge related to these indicators on a national scale. Its data will help NACWA and other organizations continue building the case for a permanent, reliable low-income water customer assistance program. 

The survey finds that on average, 20% of households are in debt to their water utility, and for tribal communities that increases to 32% of households. The findings help illustrate the financial strain experienced by utilities of all sizes and locations in covering ongoing maintenance and infrastructure costs. Contact Kristina Surfus, NACWA Managing Director of Government Affairs to discuss.  

Low-Income Water Program Continues to Draw National Attention 

An article published in the March 12 Los Angeles Times highlights new federal legislation to establish a federal water assistance program addressing key affordability issues. The Low-Income Household Water Assistance Program Establishment Act (S. 3830), introduced by Sen. Alex Padilla (D-CA), would create a permanent national water assistance program to help low-income Americans afford their water bills.   

NACWA and a group of other water associations worked closely with Sen. Padilla in crafting the legislation and have formed the Water Affordability Coalition to help advocate for a permanent federal low-income water assistance program.  Read the full story in the Clean Water Current.  

Members with questions should contact Matt McKenna, NACWA’s Director of Government Affairs.  

HHS Releases Initial Implementation and Impact Report for Federal Low-Income Household Water Assistance Program 

Jan 25, 2024The U.S. Department of Health and Human Services (HHS), through its Administration for Children and Families (ACF), released an important report January 22 on the Low-Income Household Water Assistance Program (LIHWAP). LIHWAP was established as a temporary assistance program in 2021 and expired at the end of 2023.   

The report sheds light on the program's first year of operation and its significant impact on communities across the United States. The report highlights some impressive achievements. Key successes of the program include the restoration of water and wastewater services 100,479 times, the prevention of 753,558 disconnections, and the reduction of 679,030 water and wastewater bills.  Read the full story in the Clean Water Current.  

NACWA played a key role in the ultimate establishment of the LIHWAP program as part of the various federal COVID relief efforts and is working hard – in conjunction with its water sector partners – to advocate for a permanent program. Please contact Danielle Cloutier, NACWA Director of Legislative Affairs, about the report or to discuss NACWA’s ongoing advocacy for the establishment of a permanent LIHWAP program.  

 Wipes 

The ISO Working Group is seeking common ground on the test methods for flushability. NACWA supports the IWSFG flushability specifications and is working on legislation to make them the US standard through federal legislation. The Association is also advocating for federal legislation requiring prominent “Do Not Flush” labeling on non-flushable wipes, modeled after successful state legislation in Washington, Oregon, California, Illinois, and Colorado.   

NACWA members with questions about wipes should contact Cynthia Finley, NACWA’s Director of Regulatory Affairs. 

Other Advocacy Priorities 

On March 21, the U.S. House of Representatives passed HR 7023, the "Creating Confidence in Clean Water Permitting Act," by a vote of 213-205. The bill, comprised of five standalone bills, had been approved by the House Transportation and Infrastructure Committee in January on a party-line vote. 

NACWA supports and played a significant role in helping the Committee develop two of the measures incorporated into the final bill: the Confidence in Clean Water Permits Act (HR 7013) and the Water Quality Criteria Development and Transparency Act (HR 7021).  Read the full story in the Clean Water Current.  

Contact Matt McKenna, NACWA Government Affairs Director, or Amanda Aspatore, NACWA’s General Counsel, with any questions. 

Senate Addresses Microplastics in Water, NACWA Weighs In 

The Senate Environment and Public Works Committee (EPW) Subcommittee on Chemical Safety, Waste Management, Environmental Justice, and Regulatory Oversight held a hearing on February 27 to explore the significant issue of microplastics in drinking water and wastewater. The hearing was among a series of subcommittee hearings investigating plastic pollution and its effects on human health, the climate, and the environment.  

NACWA submitted written testimony ahead of the hearing highlighting the impacts of microplastics and larger plastic pollution on public wastewater and stormwater systems. NACWA’s testimony stressed the importance of preventing these pollutants from entering our sewer systems as the most cost-effective and efficient approach to mitigate their impacts. Read the full story in the Clean Water Current.  

The official hearing webcast and witness list are available on the Senate EPW committee's website. Please contact NACWA’s Director of Legislative Affairs, Danielle Cloutier, with any questions or to discuss this further.