WASHINGTON -- Congress returned to work this week faced with the task of trying to pass several bills containing environmental and infrastructure programs of interest to the municipal bond market.
With Congress scheduled to adjourn in early October, the House got off to a flying start Monday by approving the fiscal 1995 compromise spending bill for the Environmental Protection Agency that includes funding for the agency's water infrastructure initiatives.
The spending bill, which now must be approved by the Senate, would provide $1.24 billion for state revolving loan funds that help finance wastewater treatment plants and $700 million for a new revolving fund for drinking water facilities.
The bill, which also appropriates money for the Department of Housing and Urban Development, would give the HOME housing affordability program $1.4 billion in fiscal 1995. The Community Development Block Grant program would receive $4.6 billion.
The HUD portion of the bill also contains a controversial amendment that would change the Section 8 rent subsidy program.
Under current law, housing project owners under the program receive annual subsidy increases to cover rising costs. The amendment would eliminate those increases for project owners receiving so much subsidy that the rent they take in is above what HUD deems to be a fair market rent for the surrounding area.
Housing proponents have warned that many projects in high-cost areas have difficulty making ends meet even with the annual increases. They have warned that for those projects, elimination of the annual increase could push them into default.
Another amendment to the HUD section would permit the department to offer financial incentives to encourage Section 8 project owners to refinance their high-coupon tax-exempt debt. But lawmakers have not released details on the incentives, and lobbyists have said they are not sure if the incentives are strong enough to bring the owners to market.
The Senate is expected to approve the compromise spending bill before the new fiscal year begins Oct. 1.
Meanwhile, Congress is trying to push through two separate bills to reauthorize the wastewater and drinking water programs, but both have been held up by various controversies. Funding for both bills technically expires Sept. 30, but conferees who drafted the spending bill added an amendment extending the expiration date to Nov. 1.
One bill is a six-year reauthorization of both federal standards for wastewater and the revolving loan funds that many states use to stretch their federal dollars. The other bill, also a six-year reauthorization, would extend federal drinking water regulations and create a new state revolving loan fund.
The Senate passed its version of the safe drinking water bill in May, but the House has been bogged down in a controversy over regulations governing contaminants since last summer and is unlikely to approve the measure this year.
State and local officials have said they would not support any strengthening of environmental regulations because of the additional costs to the states. "We're not in a position at this time" to support the legislation, said Knoxville, Tenn., Mayor Victor Ashe.
States have already made the "hard decisions" based on the possible loss of federal funding, said Terry Agriss, president of the New York State Environmental Facilities Corp.
Chances for passage of the wastewater bill are better, sources said. The House Public Works and Transportation Committee has not thrown in the towel and is still trying to work out a compromise with committee factions, said communications director Eric Federing.
The Senate is posed to act as soon as the House does, said Deborah DeYoung, press secretary to the Senate Environment and Public Works Committee.
Congress also has several fiscal 1995 appropriations bills to pass before the scheduled October adjournment.
The House and Senate both approved similar versions of the transportation spending bill and are hammering out the details in conference with final votes expected in the next few weeks.
The Senate version, passed in July, would provide $20.3 billion for highways and $4.6 billion for mass transit projects. The House version, passed in June, would provide $19.8 billion for highways and $4.7 billion for mass transit.
House and Senate conferees are also working out their differences on a bill to designate about 160,000 miles of highway for priority funding.
The House included about $2 billion for special projects in its bill, which was approved in May. In August, a Senate panel approved a "clean bill" containing no funding. The full Senate is expected to approve its version in the next week.
The Senate bill is designed to be a blueprint for future spending, not a bill giving funding to the "roads that are in the districts of those people with the most pull on Capitol Hill," DeYoung said.
There is no penalty if the bill is not passed this year, but hopefully House members will use the Senate bill as an example and realize "the Senate is not going to accept a bill with pork" and drop their $2 billion in projects, DeYoung said.
In August, President Clinton signed into law a bill reauthorizing the airport construction grant program that would provide $6.5 billion over three years. The final bill was delayed in the Senate for nearly a year, in part because of a controversy over the fees that airports impose on airlines. The House passed a version last October, but the Senate did not pass a bill until this summer.
Under the final agreement, any airline that questions a fee would be required to continue paying the fee until the dispute is resolved. If the U.S. secretary of transportation finds the fee unreasonable the airport would have to repay the fee.
