SWIC, Congressional Leaders Talk PAB Legislation

On June 2, 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 introduce and 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. 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,?? Rep 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 said. ?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.?

Rep. 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.”

Sen. 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.

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. ?The legislation could generate as much as $5 billion annually in private capital for projects, generating $6 billion in construction equipment demand over the next decade while supporting nearly 1,000 equipment industry jobs over that time,? Watters said.

?In the United States, a water main breaks every two minutes. The nation?s water infrastructure, especially the pipes underneath the ground we walk on, is aging and is in need of significant investment,? said United Water Executive Vice President Robert Iacullo. ?We at United Water know that cities across New Jersey ? and across our nation ? need high levels of investment for water infrastructure. That is why we support the swift passage of this legislation by Congress.

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. Sen. 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 plans to attach the water PAB legislation to a transportation bill in Committee this year, similar to what he did two years ago. The Senate tax committee member said the legislation was on its way to the President as part of a larger transportation bill until Republican Ways and Means Committee ?Chairman Camp removed it from the bill.?

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