Washington Bonds issued to finance the construction or improvement of water and sewage facilities would not be subject to the private-activity bond volume cap if a new bill introduced in the House is passed by Congress.
HR 6194, the Sustainable Water Infrastructure Investment Act of 2008, is currently pending before the House Ways and Means Committee. Rep. Bill Pascrell Jr., D-N.J., a panel member, introduced the legislation June 5. The text of the bill asserts that removing the cap's restrictions from these facilities will give states the chance to address pressing infrastructure needs as federal funds become more scarce.
"Federally mandated state volume cap restrictions in conjunction with other priorities have limited the use of tax-exempt securities on water and wastewater infrastructure investment ... Removal of state volume caps for water and wastewater infrastructure will accelerate and increase overall investment in the nation's critical water infrastructure," the bill says. "In light of constrained federal budgets, the availability of exempt-facility financing represents an important financing tool to help close the gap between funds currently being invested and water infrastructure needs."
The bill claims that government studies have shown that between $500 billion and $800 billion will need to be invested in water and wastewater infrastructure over the next 20 years to maintain current facilities, build new ones, and ensure facilities adhere to new water quality standards.
Under the federally established volume cap, states are limited in the number of such bonds they can issue by a formula that is based on their population figures. In 2007, states issued $2.6 billion of bonds for exempt facilities, which include waste and wastewater facilities.