House subcommittee passes financing for water, sewage revolving loan funds.

WASHINGTON -- A House appropriations subcommittee approved a bill Friday that would provide $2 billion for two state revolving loan fund programs designed to help finance both safed drinking water and sewage treatment projects.

The existing sewage treatment revolving fund would receive $1.3 billion in fiscal 1995, and the proposed safe drinking water revolving fund would receive $700 million under the measure approved by the House Appropriations Committee's veterans affairs, housing and urban developement and independent agencies subcommittee. The total amount is $82 million more than the Clinton Administration requested for fiscal 1995, which begins Oct. 1, and $25 million more than requested for the current fiscal year.

Congress is working on separate bills to reauthorize both the overall sewage treatment and safe drinking water programs.

One bill would reauthorize the six-year-old revolving fund program many statesd now use to help stretch their federal dollars by leveraging bonds to help build water sewage treatment facilities.

The other would renew the safe drinking water act and establish the new revolving fund program to help finance construction of drinking water treatment facilities.

Once Congress passes the overall authorization legislation, the actual funds for the drinking water loan program would be appropriated.

The Senate Appropriations Committee has not acted yet on the budget for the Environmental Protection Agency, which administers the sewage and water treatment programs.

The only surprise in the House appropriations bill is $500 million in grants that is set aside for "hardship communities," said James N. Smith, executive director of the Council of Infrastructure Financing Authorities. "Hardship, my eye. They're cities like New York, Boston, and Los Angeles," Smith said. The $500 million comes on top of $500 million that was set aside in last year's appropriations process, he said.

But Smith said he hopes Congress will eventually take the full $1 billion earmarked for so-called hardship communities and give it to the revolving funds.

The measures to renew the drinking water and sewage treatment programs have been beset by controversies between state and local governments and environmentalist groups over water quality testing regulations and wetlands management, among other issues.

But Linda Eichmiller, deputy director of the Association of State and Local Interstate Water Pollution Control Administrators, said the decision by the appropriations panel to earmark money for the revolving funds for the upcoming year is a good sign that both reauthorization bills may be approved by Congress this year.

Eichmiller said she wishes that more money had been earmarked for the revolving funds, considering the program lost $800 million last year when President Clinton's $16 billion stimulus package was whittled down by Congress. "At least we'll hold our own," she said. The funding levels are slightly more than fiscal 1994 levels.

Smith said the amounts earmarked for the revolving funds "are pretty good" considering the tight budget situation Congress faces. But he cautioned that Congress must reauthorize the programs by Dec. 31, or the money may be lost.

A provision in the House appropriations bill calls for the money to be authorized by the end of the year or it could be put back into the general fund. However, Smith said there is a chance that the appropriations committees may reallocate the money to the revolving funds and continue waiting for the reauthorization legislation to be approved by Congress.

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