Some industry groups are concerned the Environmental Protection Agency’s interpretation of the fiscal 2010 law appropriating funds for the drinking- and clean-water State Revolving Loan Fund programs could jeopardize attempts to pass a long-awaited five-year SRF reauthorization bill in the Senate.

The Senate Environment and Public Works Committee approved a five-year reauthorization bill in May 2009. The bill, known as the Water Infrastructure Financing Act of 2009, would authorize $20 billion through 2014 for the clean-water SRF and $15 billion for the drinking-water SRF. In March 2009, the House authorized $13.8 billion for the clean-water SRF over five years.

But floor action in the Senate has stalled. “We’re really close to getting a re-authorization bill through Congress,” says Tom Porta, president of the Association of State and Interstate Water Pollution Control Administrators and acting administrator at the Nevada Dept. of Environmental Protection. “One of the issues that is holding things up is related to [EPA’s] guidance. We have gotten word that some senators are concerned about this guidance and the expansion of Davis-Bacon,” he says.

In a Nov. 30 memo, EPA said Davis-Bacon, which implements prevailing wages, should apply to all SRF-funded water and wastewater projects. EPA wants the measure to apply to loans, bonds, grants and other financing executed during fiscal 2010, even if most funding is from prior years.

Diane Shea, the American Council of Engineering Companies’ director of environment and energy programs, says EPA’s idea expands Davis-Bacon and is problematic. “Projects are not started and stopped on a fiscal-year basis—they’re ongoing,” she says. A retroactive application of Davis-Bacon could delay critical water infrastructure projects and prevent others from moving forward, Porta says.

EPA maintains it merely is interpreting the plain language of the law.