August SWIC Newsletter

In June, SWIC members joined PAB bill sponsors Sen. Bob Menendez (D-N.J.) and Rep. Bill Pascrell (D-N.J.) at the site of a broken water valve in Cliffside Park, N.J., to discuss their water and wastewater finance legislation, the Sustainable Water Infrastructure Investment Act of 2014, H.R. 4237 and S.2345.

Tim Watters, President of Hoffman Equipment and Chairman of Associated Equipment Distributors (AED), local members of the Laborers International Union of North America (LIUNA) and United Water Executive Vice President Bob Iacullo also participated in the event.

The Sustainable Water Infrastructure Act would stimulate private-sector investment to fund these critical repairs by modifying the federal tax code to remove caps on the issuances of government private activity bonds (PAB) for water and wastewater projects. Currently, annual volume cap exemptions exist for PAB financing of airports, seaports, solid waste facilities and certain inter-city rail projects.

Calling water infrastructure investment a ?win-win for everybody,? Watters said the bill will increase private investment, create jobs and address years of underfunding in one of our nation?s greatest resources ? clean water.

?In the United States, a water main breaks every two minutes,? added Iacullo. ?The nation?s water infrastructure, especially the pipes underneath the ground we walk on, is aging and is in need of significant investment. We at United Water know that cities across New Jersey ? and across our nation ? need high levels of investment for water infrastructure.?

The water policy leaders highlighted the decrepit condition of New Jersey?s water infrastructure and its impact on the local economy. ?New Jersey needs about $8 billion for drinking water infrastructure ? that?s billion with a ?b,?? Pascrell told the audience. Wastewater needs in New Jersey are almost $17 billion.

?When we don?t see it, we don?t deal with it until it?s a crisis,? Menendez added. ?When?s that crises? When the water main erupts, when the sinkhole occurs, when communities have their traffic snarled, and when citizens lives are affected. People can?t get to their bank or to their commerce and there is a ripple effect ? a negative ripple effect.?

Pascrell, a longtime champion of PAB legislation, pointed out the benefits of water infrastructure projects in terms of enhancing public health, environmental protection and job creation. ?Our common sense solution not only invests in our nation’s aging infrastructure, but it creates good paying construction jobs that are literally beneath our feet in a way that costs the taxpayers very little,? Pascrell said. ?It’s a win for our infrastructure, our environment and our economy.?

Menendez also highlighted the lack of attention given to America?s water and water infrastructure, and the pressing need to reevaluate. ?We?ve under-invested in our infrastructure, certainly we?ve under-invested in water systems, and now we?re paying the price, he said. ?These systems are old and badly degraded. Many of them are waiting to fail, and they need to be fixed.?

PABs provide low-cost financing for public-private partnership, which allow for significant cost, risk and long-term debt to shift from a public entity to a private partner, while preserving public ownership of the project.

The lawmakers noted the bicameral, bipartisan support for their legislation and passage by the U.S. House of Representatives twice and the U.S. Senate once already. Menendez, who is Chairman of the Senate Banking Subcommittee on Housing, Transportation and Community Development and a Member of the Finance Subcommittee on Energy, Natural Resources and Infrastructure, told the audience he planned to attach the water PAB legislation to a transportation bill in Committee this year, similar to what he did two years ago.

Sen. Menendez Offers Water PAB Amendment to Highway Bill

On June 26, Sen. Bob Menendez (D-N.J.) offered a modified version of his bipartisan water bond legislation, co-authored with Sen. Mike Crapo (R-Idaho), as an amendment to a transportation authorization bill during an Executive Session of the Senate Finance Committee.?

Menendez?s amendment would ?lift the volume cap on private activity bonds (PABs) for water and wastewater projects for a period of time such as would be fully offset. Similar to current exemptions for airport, port and solid waste projects, removing these projects would make the PAB program far more effective for providing the critically needed financing of water and wastewater projects across the nation.??

The Menendez provision was offered to amend the Preserving America?s Transit and Highways (PATH) Act ? legislation to authorize transportation programs and to shore up the Highway Trust Fund through the end of the year. ?

YOU CAN HELP!

Now is the time to open the door to private capital investment in America?s environmental infrastructure. Call your Congressmen and U.S Senators at 202-224-3121 and ask them to co-sponsor the Sustainable Water Infrastructure Investment Act, in the House, H.R. 4237, and in the Senate, S.2345.

The SWIC Newsletter for UIM is co-authored by SWIC co-executive directors Bruce Morgan, Principal of Water Policy Associates, and Eben Wyman, Principal of Wyman Associates. Bruce can be reached at bruce@waterpolicyassociates.com and Eben, at 703-750-1326 or eben@wymanassociates.net.

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