THIS WEEK IN WASHINGTON
For the Week of August 6, 1999
This weekly report is written by ASCE's Government Relations staff. If you have questions or comments about any items in this report, please contact Brian Pallasch, Michael Charles or Martin Hight at 202/789-2200 or by E-mail at bpallasch@asce.org, mcharles@asce.org, or mhight@asce.org.

Inside This Week:
CONGRESS OKs $792 BILLION TAX CUT
HOUSE MANEUVERS OF CONFERENCE ON AIR-21 LEGISLATION
KELLY-TAUSCHER BILL WOULD BOOST CLEAN WATER FUNDING
WATER RESOURCES DEVELOPMENT ACT '99 SENT TO PRESIDENT
HOUSE COMMITTEE PASSES SUPERFUND REFORM BILL
SENATE COMMITTEE FAILS TO REACH CONSENSUS ON SUPERFUND

CONGRESS OKs $792 BILLION TAX CUT
The House and Senate were able to work out their differences and pass the 10-year $792 billion tax cut bill (H.R. 2488) on Thursday, August 5th. The legislation, which will not be sent to the President until Congress returns from its August recess, will almost certainly be vetoed. The measure passed the Senate by a vote of 50-49 and the House by a vote of 221 to 206, nowhere near the two thirds needed to override the President's veto. President Clinton has indicated that he would accept a tax cut in the $200-250 billion range, leaving the possibility open for a compromise later this year.

Among the provision in the final bill are two that ASCE has been tracking closely. The research and experimentation tax credit, extended for five years in the House bill and permanently in the Senate bill, was extended for five years in the final bill. The employer paid educational assistant exemption (Section 127), extended permanently for both graduation and under-graduate courses in the Senate bill and not mentioned in the House bill, was extended for three and half years for undergraduate course only in the final bill.

Other provisions of the bill include a reduction in the marginal income tax rate by 1 percentage point, a phase out of the death tax over 10-years, rate reduction for individual capital gains, full deduction for health insurance premiums for the self-employed, and an increase in limits on pre-tax contributions to pension plans as well as increased tax deductible limits on 401(k) deposits.

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ASCE strongly supports H.R. 1000 and S. 1467 and will be urging Key Contacts to communicate with their Senators in the coming weeks.

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KELLY-TAUSCHER BILL WOULD BOOST CLEAN WATER FUNDING
ASCE is endorsing bipartisan legislation introduced on August 5 would amend the Clean Water Act (CWA) to authorize $15 billion in expenditures over the next five years to rebuild America's aging wastewater treatment plants. The bill, H.R. 2720, would provide $3 billion annually from 2000 to 2004 for capital grants to the states for the construction of publicly owned treatment works. The grant money would eventually be repaid to the federal treasury by the local communities.

The bill was introduced by Rep. Sue Kelly (R-NY) and Rep. Ellen Tauscher (D-CA). It is being supported by the Clean Water Council, a broad-based coalition of infrastructure proponents, including the Associated Builders and Contractors, the National Utility Contractors Association and others. ASCE is a member of the Council.

The Kelly-Tauscher bill would reauthorize federal funding for state water pollution control revolving funds that expired in 1994. The bill would add a new provision to the CWA to extend the grant repayment period for economically disadvantaged communities from a maximum of 20 years to as much as 40 years.

The revolving loan fund program was created by the Water Quality Act of 1987.

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WATER RESOURCES DEVELOPMENT ACT '99 SENT TO PRESIDENT
On Thursday August 5, the House passed the Water Resources Development Act of 1999 (WRDA), and sent it to President Clinton for his signature. The legislation which authorizes over $5 billion in navigation, recreation, storm damage reduction, ecosystem restoration, shore protection, flood control and flood damage reduction programs. ASCE joined with a large coalition of cities, counties, ports authorities, businesses and others urging Congress to complete action on the measure.

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HOUSE COMMITTEE PASSES SUPERFUND REFORM BILL
By a wide margin, the House Transportation and Infrastructure Committee approved legislation on Thursday that members claim will reform the Superfund program to increase the efficiency of the cleaning up of contaminated land.

"The Superfund reform bill will bring some common sense reform to a program that is going to clean up America," said Chairman Bud Shuster (R-PA). "Acres and acres of contaminated land across America will be put back into productive use as a result of this bill."

By a vote of 69-2, the Committee passed H.R. 1300, the Recycle America's Land Act. The bill encourages "brownfields" redevelopment by protecting innocent landowners and cleanup volunteers from Superfund liability, and establishing a brownfields redevelopment grant program.

The bill also empowers states to take a greater role in cleaning up hazardous waste sites; exempts innocent individuals and small businesses from Superfund liability; protects municipalities from costly Superfund litigation; and establishes a "fair share" liability plan for future Superfund sites.

H.R. 1300 would authorize the Environmental Protection Agency (EPA) to spend $1.5 billion per year through Fiscal year 2003, declining by $100 million a year each year between 2003 and 2006, and dropping to $975 million by 2007.

It also calls on the House Ways and Means Committee and the Senate Finance Committee to renew the taxes that supported the Superfund program between 1980 and 1995. The bill would reauthorize the taxes for the period beginning January 1, 2000, and ending December 31, 2007. It would make the rate of tax and combination of taxes be commensurate with the revenue needs,and it would ensure that the taxes were reauthorized at a lower rate, and decline over time, to avoid creating any surplus in the cleanup fund.

The bill was approved despite the objections of the Clinton Administration. The Department of Justice (DOJ) and the Environmental Protection Agency issued statements condemning H.R. 1300.

"The Department of Justice . . . continues to oppose strongly the bill," the DOJ statement said. "H.R. 1300 will slow cleanups, dramatically expand [litigation] costs, drag small parties into the Superfund process, punish companies that settle with the United States, relieve some polluters of responsibility and shift their cleanup costs to the taxpayers."

The Administration said the bill would prevent the federal government from being able to take action at Superfund sites to protect human health and the environment.

SENATE COMMITTEE FAILS TO REACH CONSENSUS ON SUPERFUND Members of the Senate Environment and Public Works Committee announced this week that they are hopelessly deadlocked over the best way to fix the Superfund law. At a business meeting on Tuesday, Chairman John Chafee (R-RI) said he was abandoning efforts to write a bipartisan Superfund reform bill in the 106th Congress, which ends in January 2001.

Chafee said Republicans and Democrats on the Committee remain sharply divided over the issues of natural resources damages, liability waivers and the need to reimpose the Superfund chemical, oil and corporation taxes that expired in 1995.

"Superfund has not yielded an agreement," said a frustrated Chafee. "There is a long list of major issues that separate us. I can see no [Senate] deal on Superfund. The House may well produce a widely supported bill that merits our consideration. Three cheers for them if they do."