June SWIC Newsletter

Last month, Sen. Robert Menendez (D-N.J.) and Sen. Mike Crapo (R-Idaho) reintroduced the Sustainable Water Infrastructure Investment Act to the Senate. The legislation is identical to the water private activity bond (PAB) legislation introduced by Reps. John Duncan (R-Tenn.) and Bill Pascrell (D-N.J.) in March.

The Menendez/Crapo bill, S.2345, would remove state volume caps on PABs for water and wastewater projects, enabling billions of dollars in private capital investment for the nation?s critical water infrastructure. Exceptions from the federally-imposed state volume cap are currently provided for other government-owned facilities such as airports, high-speed intercity rail and solid waste disposal sites.

?We?re all too familiar with the increasing frequency of water main breaks that unexpectedly flood random areas, disrupting businesses, transportation, and the daily lives of so many on any given day,??said Sen. Menendez. ?This legislation could create over a million jobs leveraging a modest investment by the federal government into billions of dollars of critical private economic investment to upgrade and rebuild aging water infrastructure in communities across the nation.?Creating private sector jobs to ensure American families have reliable access to clean water is a win for our workers, taxpayers and the communities we live in.?

?Small communities need, and deserve, federal support to comply with federal water and wastewater guidelines,? Sen. Crapo added. ?This bill would allow local communities to leverage private capital markets in combination with other financial mechanisms to finance water and wastewater infrastructure projects. It makes financial sense for communities and will improve public health and water quality.?

Last Congress, Sens. Menendez and Crapo added the measure to the Senate transportation reauthorization bill in the Senate Finance Committee where it received unanimous approval from their Committee colleagues. Subsequently, the Senate passed the PAB measure as part of S.1813, the Highway Investment, Job Creation and Economic Growth Act of 2012. Unfortunately, the PAB measure along with many other tax provisions did not make it to the President?s desk for signature and enactment.


WHAT OTHERS ARE SAYING ABOUT THE WATER PAB LEGISLATION?

The U.S. EPA?s Environmental Financial Advisory Board recommended that private activity bonds for water and wastewater facilities be exempt from the state volume cap after recognizing that ?state volume caps were constraining tax-exempt financing in a way that was limiting the supply and/or increasing the cost of investment funds.?

Here?s what other PAB supporters are saying about the legislation:
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?This bill from Sen. Menendez, Sen. Crapo and their colleagues brings our water infrastructure in line with other components of our country?s critical infrastructure such as bridges and roads, and it will also help us meet our current and future health and safety needs as they relate to the most critical of natural resources. ?This legislation has real benefits for consumers as it will translate into lower financing costs than taxable debt and the savings are passed on to our customers.?

?? ?United Water

?We encourage you to embrace EPA?s recommendation to remove water and wastewater projects from the restrictive PAB state volume cap by sponsoring legislation and working to advance the measure through Congress. The legislation will help local communities repair and replace aging infrastructure by providing much needed access to capital while containing costs.?
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?????? ?National Association of Regulatory Utility Commissioners

?Water infrastructure investment is a win-win for everyone, including the government. Financing from the private sector is an even better situation. According to a recent study commissioned by AED by researchers at the College of William & Mary?s Thomas Jefferson Program in Public Policy, investing $1 in sewer systems and water infrastructure generates $2.03 in tax receipts ($1.35 for the federal government) over 20 years.?
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?????? ?Associated Equipment Distributors

OHIO GENERAL ASSEMBLY TO CONGRESS: ?PASS THE PAB BILL!?

The 130th General Assembly of Ohio expressed ?support of federal legislation to remove the state volume cap for private activity bonds for water and wastewater infrastructure projects,? with the introduction and advancement of House Concurrent Resolution 14 (H.C.R. No. 14). The resolution was introduced by Ohio Rep. Mark Romanchuk (R-Ontario), Ohio House Speaker William Batchelder (R-Medina) and others, with the Ohio Senate concurring.?

H.C.R. No. 14 asserts, ?Removing the state volume cap applicable to private activity bonds for public purpose water and wastewater infrastructure projects would allow state and local governments to leverage private capital markets in combination with other finance mechanisms to provide an influx of low-cost private capital for financing water and wastewater infrastructure projects.?

The state measure directs the Clerk of the Ohio House of Representatives ?to transmit duly authenticated copies of this resolution to the President of the United States, to the President Pro Tempore and the Secretary of the United States Senate and to the Speaker and the Clerk of the United States House of Representatives, to the members of the Ohio Congressional delegation and to the news media of Ohio.?

SWIC members met with U.S. House Speaker John Boehner?s (R-Ohio) legislative staff in May to provide a copy of the Ohio resolution and to discuss the Duncan/Pascrell water PAB legislation, H.R. 4237.

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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