Senate Finance Votes To Remove Water Infrastructure Roadblock
By Kevin Westerling, Editor, Water Online
The Senate Finance Committee approved a measure on Feb. 7 that would remove the volume caps on tax-exempt private activity bonds for drinking water and wastewater infrastructure projects for the next six years, according to Bloomberg BNA.
Strong bipartisan support was evidenced by a unanimous voice vote for the measure, which amends the Internal Revenue Service code within the Highway Investment, Job Creation and Economic Growth Act of 2012. The Finance Committee also passed the underlying surface transportation reauthorization bill, known as the Moving Ahead for Progress in the 21st Century (MAP-21) Act (S. 1813), by a 17-7 margin, with debate by the full Senate expected in the coming weeks.
Proposed by Sen. Robert Menendez (D-N.J.), the amendment is designed to increase funding for water and wastewater improvements by generating private capital in a time when public funding for ailing infrastructure is severely limited. The American Society of Civil Engineers (ASCE) recently forecasted an $84 billion shortfall in water infrastructure investment by 2020, and the U.S. Environmental Protection Agency (EPA) called for investment of $334.8 billion over the next 20 years in its latest Drinking Water Infrastructure Needs Survey and Assessment.
In advance of the vote, the Water and Wastewater Equipment Manufacturers Association (WWEMA) issued a memo of support stating that a five-year bill would provide $25 billion investment in water infrastructure, create 700,000 jobs, and add $225 billion to the national economy. According to WWEMA President Dawn Kristof Champney, private activity bonds — by facilitating public-private partnerships — are the single-most effective tool for financing long-term, capital-intensive infrastructure projects.
"This measure is the only chance our industry has this year for attracting additional capital into water and wastewater infrastructure projects, so everyone needs to get on board and urge their congressional representatives to support its immediate passage," said Kristof Champney.
The proposed amendment mirrors the Sustainable Water Infrastructure Investment Act of 2011 (S. 939, H.R. 1802), introduced by Menendez and Rep. Bill Pascrell (R-N.J.) in May 2011, which sought to permanently remove the cap. The EPA, with endorsement by the National Association of Regulatory Commissioners, also proposed permanent elimination of the borrowing cap as part of its fiscal year 2008 budget request to Congress.
While motions to eliminate these restrictions altogether are sure to linger on, supporters of this new provision will know shortly if they have earned a six-year stay.