Eno Transportation Weekly

House Appropriators Boost FY20 Water Infrastructure Funding +$600m Over Last Year

May 16, 2019

This week, the House Appropriations Committee released the text of the two draft fiscal 2020 general appropriations bills that fund federal water infrastructure programs. Both bills – the Energy and Water Development bill and the Interior and Environment bill – were marked up in subcommittee, without amendment, yesterday. They will be considered by the full Appropriations Committee next week.

Together, the two bills increase appropriations for water infrastructure programs by over $600 million (6 percent) above the 2019 level. The 2018 levels were roughly comparable with the 2019 levels, but this was made possible by the enormous sums given to the appropriators by the two-year FY 2018-2019 budget deal. If you use FY 2017 as a starting point, the House’s totals are $2.2 billion, or 26 percent, above 2017. The chart below shows the totals, in billions of dollars. (These totals exclude emergency appropriations, and there are a lot of those in the pending FY19 disaster relief bill.)

No budget deal is in place for fiscal 2020 yet, and if the President, the Senate, and House cannot pass a law this budget cycle setting new spending cap levels, those ambitious FY 2020 appropriations totals will have to be reduced back to, or below, the 2017 levels.

Corps of Engineers water resources. The House’s draft Energy and Water bill appropriates $7.356 billion for the “civil works” (water resources) program of the U.S. Army Corps of Engineers. This aggregate total is $357 million (5.1 percent) above the 2019 enacted total and a staggering $2.529 billion (52.4 percent) above the amount requested by the Trump Administration.

  • Studies. The “Investigations” account pays for feasibility studies that, if successful, eventually become new construction projects. The House bill increases the account total to $135 million (up from $125 million last year). Since the Corps budget request indicates that four ongoing studies will be completed during FY 2020, the bill directs the Corps to “initiate at least six new study starts during fiscal year 2020.”
  • Construction. The bill appropriates $2.337 billion for construction, $154 million more than last year. The bill directs the Corps to “initiate six new construction starts during fiscal year 2020: Provided…That no allocation for a new start shall be considered final and no work allowance shall be made until the Secretary provides to the Committees on Appropriations of both Houses of Congress an out-year funding scenario demonstrating the affordability of the selected new starts and the impacts on other projects…”
  • Nuclear sites. The House bill rejects the Administration proposal to move the cost of cleaning up former nuclear weapons production facilities from the Corps (which carries out the work) to the Energy Department (which caused the mess in the first place).
  • Harbor Maintenance Trust Fund. The House bill once again rejects the Trump Administration’s proposal to move all appropriations for the Corps from the Harbor Maintenance Trust Fund into one explicit account. Instead, the HMTF appropriations are once again buried in several different accounts (depending on the depth of each individual harbor dredging project that will be included in the committee report). The committee says that total HMTF appropriations under the bill will total $1.697 billion, $40 million more than the Trust Fund received in taxes and interest in 2018.
  • Border wall. The House bill will undoubtedly draw opposition from the White House due to section 108 of the bill: “Sec. 108. Notwithstanding any other provision of law, none of the funds appropriated or otherwise made available by this Act or any prior appropriations Acts for the Civil Works Program of the United States Army Corps of Engineers may be committed, obligated, expended, or otherwise used to design or construct a wall, fence, border barriers, or border security infrastructure along the southern border of the United States.”

Environmental Protection Agency water infrastructure programs. The House bill appropriates a total of $3.110 billion for grants to capitalize the various state revolving funds (SRFs) that make low-interest loans to municipalities for sewer, water treatment, and drinking water facilities. This is $252 million (8.8 percent) above the 2019 enacted level and $1.127 billion (56.8 percent) above the aggregate level requested by the Trump Administration.

There are two types of SRFs: those that make loans under the Clean Water Act, which receive $1.810 billion under the House bill (+6.8 percent over last year), and those that make loans under the Safe Drinking Water Act, which receive $1.300 billion under the House bill (+11.7 percent over last year).

The bill appropriates $45 million for the relatively new Water Infrastructure Finance and Innovation Act (WIFIA) program under which the EPA makes direct loans to municipalities for various types of water projects. This is a bit lower than last year, but because the Office of Management and Budget regards these loans as such an excellent federal credit risk, relatively small amounts of appropriations can enable vast loan amounts. (It is estimated that the $131 million in appropriations over fiscal 2018 and 2019 may enable around $13 billion in direct federal loans under the program.) But it will take so long to make that many loans that giving the WIFIA program too much money too quickly would only ensure that large unexpended balances build up, which is what has happened to the TIFIA surface transportation loan program.

The bill maintains a $94 million funding level for Leaking Underground Storage Tank (LUST) Trust Fund remediation programs, which are supported by the 0.1 cent per gallon of federal gasoline and diesel fuel taxes that does not go to the Highway Trust Fund.

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