A bipartisan bill proposed in the US Senate would remove caps on bond levels for water infrastructure projects.
The Sustainable Water Infrastructure Investment Act of 2010 (S. 3262) would remove state volume caps on private activity bonds (PABs) for water and wastewater projects. The bills sponsors say it will free up billions of private capital dollars for investment in the nation’s water infrastructure.
A similar bill introduced in the U.S. House of Representatives last year by Congressman Bill Pascrell (D-NJ) was passed by the House as part of the Small Business and Infrastructure Tax Act last month.
According to the U.S. Environmental Protection Agency (EPA) and the Government Accountability Office, there is an investment gap of more than $500 billion for necessary infrastructure upgrades over the next 20 years to ensure safe drinking water and wastewater treatment.
American Water (NYSE: AWK), the largest investor-owned U.S. water and wastewater
company, supports the bill. The company said the bill would create up to 57,000 environmental jobs and convert a modest investment by the federal government into billions of dollars of necessary economic investment into the nation’s aging water and sewage infrastructure.
"This legislation will not only address the nation’s deteriorating water and wastewater infrastructure, estimated to be a trillion dollar challenge by the EPA, it will also generate thousands of jobs and help stimulate the economy," said Don Correll, President and CEO of American Water Works Company, Inc. "Exemption for bond caps exists for other infrastructure but not for water. Removing these caps will free up crucial investment dollars and create needed jobs."
Other major infrastructure components already exempt from existing caps include airports, high-speed rail and solid waste disposal. PAB issuance is one of the fastest forms of federal assistance when applied to water and wastewater projects, with only 90–120 days needed to complete the process, from approval to sale to get Americans to work.
Providing opportunities for public water providers to leverage private sector investment in water and wastewater infrastructure, the bill is also expected to generate significant tax revenue for states and communities across the country. According to the Clean Water Council, each $1 billion invested in water infrastructure yields an increase of $82.4 million in state and local tax revenue.
The bill was introduced by Senator Robert Menendez (D-NJ) and
cosponsors Senator Kit
Bond (R-MO) Senator Mike Crapo (R-ID) and Senator John Kerry (D-MA).