Is Federal Overreach ‘Creeping’ Into New Water Infrastructure Guidance?

The top Republican on a Senate panel on Tuesday expressed concerns that recent Environmental Protection Agency guidance for states on using infrastructure act water quality funding was “creeping” overreach by the federal government.

Sen. Cynthia Lummis of Wyoming, ranking member on the Senate Environment and Public Works Fisheries, Water and Wildlife subcommittee, said that states have traditionally had leeway over using water quality revolving fund dollars. But, she said, of the March 8 EPA guidance: “Over time, federal requirements have grown more and more expansive. Some call that creeping conditionalism.”

Lummis’ comments Tuesday came as water experts told the subcommittee that the EPA should give states more flexibility over how they spend $50 billion in the bipartisan Infrastructure Investment and Jobs Act to improve the nation’s drinking water and wastewater systems. They also said Congress should do away with a threat in the law that could lead to states having water quality funds taken back if they do not act quickly enough to use the money.

Asked by Lummis for examples of “creeping conditionalism,” Susan Bodine, EPA’s assistant administrator for enforcement and compliance assurance during the Trump administration, said it was “troubling” that the guidance contains “a lot of language about what EPA expects states to do.”

Bodine, who also served previously as chief counsel for the Senate Environment and Public Works Committee, noted that the guidance says that states’ plans for using the funds “should encourage [State Revolving Funds] recipients to support safe, equitable and fair labor practices.” The guidance mentioned such steps as adopting collective bargaining agreements and project labor agreements and community benefits agreements. 

The infrastructure act does not require those measures. And it could confuse states that might think it is a requirement, said Bodine, now a partner with Earth & Water Law, an environmental consulting firm.

“The EPA should void any suggestion they’re going to attach any strings to the money that isn’t part of the statute,” she said.

Lummis also called the language in the EPA guidance “troubling.”

Bodine noted that the law requires that 49% of both the Drinking Water State Revolving Fund and DWSRF lead service line replacement funding go to disadvantaged communities as grants or forgivable loans, but allows states to define what disadvantaged means.

However, Bodine added that the guidance makes reference to Justice40, President Biden’s goal to assure that 40% of the benefits of certain federal environment funding go to disadvantaged communities.

“Working collaboratively, EPA and SRF programs can make progress towards Justice40,” the guidance states.

Bodine expressed concern the federal government will overlay its definition of disadvantaged over those created by states.

In addition, Bodine said, Congress should reconsider a requirement in the infrastructure act for states to sign agreements with those receiving revolving fund dollars within a year after getting the money from the federal government. Otherwise, the act allows EPA to reallocate dollars to other states.

However, Bodine said that it may take disadvantaged communities without enough staffing more time to apply for the infrastructure dollars from their states.

“As a result of the deadline, you could get a reallocation of the funds away from the states with more disadvantaged communities because of the lack of capacity to get through the loans process,” she said.

“I don’t know that it was anyone’s intent, but it could be a consequence of the deadline,” she said.

Praises for Other Requirements

Joshua Schimmel, a National Association of Clean Water Agencies board member, praised another IIJA requirement for states to make 49% of their clean water revolving fund dollars available to communities in the form of grants or forgivable loans.

“Federal water investment since the 1980s has overwhelmingly been loans, so this is an important pivot,” he said.

The use of grants and debt forgiveness “will help communities access federal dollars that typically struggle to qualify for traditional loans,” said Sen. Tammy Duckworth of Illinois, the subcommittee’s Democratic chairwoman.

States and Cities Want More Flexibility 

Nevertheless, Schimmel also called for additional flexibility, saying the infrastructure law does not allow the money to be used for “important steps” like assessing the presence of the contaminants or pretreating water systems. 

States and cities may also have to make changes, said Ras Baraka, mayor of Newark, N.J., which last year replaced all of its lead service pipes.

Baraka said the city faced the problem of replacing pipes on private land. The state changed state law to allow the use of public dollars on private property to do the removal. In addition, he said, many property owners live out of town. 

“This was essential to the project’s success,” he said.

In addition, the city allowed workers to go on private property without the permission of owners.

“This was critical because nearly 80% of Newark residents rent and tracking down property owners for access to their property would have been time consuming and costly,” he said.

These comments Tuesday followed those of other officials in a House hearing last month that also called for states to have more flexibility to use the funds for such things as identifying lead pipes for removal.