Water infrastructure projects lose tax-exempt bond option

WASHINGTON — The House Ways and Means Committee on Wednesday took proposed tax code changes out of the bill authorizing $25 billion for water infrastructure projects nationwide that would have allowed for a greater use of state-issued bonds to fund water and sewer projects. Committee Chairman Bill Thomas, R-CA, said he could not back tax provision changes for water and sewer infrastructure projects without giving the entire concept further consideration in his committee. He promised hearings on the subject later this year, Environment & Energy Publishing (E&E) reported. E&E said it is unclear when the remaining pieces of HR 3930, which were approved last month by the Transportation and Infrastructure Committee, will hit the House floor for debate. At issue Wednesday was a section of the legislation that would have sought to encourage private investment in water infrastructure projects by allowing tax-exempt bonds to be used for public-private water projects because of the overarching public benefits that those projects would have, the article said. Under the provision, water infrastructure projects would be placed outside a state's current tax-exempt bond cap so they no longer compete with items such as education, housing and other local programs, E&E reported. The bill would have allowed states to earn a higher rate of return on their investments into the Clean Water Act's State Revolving Loan Fund (SRF) by keeping their earnings instead of sending them to the federal treasury, the articles said. Rick Farrell, executive director of the Council of Infrastructure Financing Authorities, has been lobbying on Capitol Hill for the second provision, according to E&E. He said an internal analysis of the change would give states another $400 million a year to use for water infrastructure projects while taking between $100 million and $200 million from the federal treasury. While the legislative push to reauthorize the SRF and its drinking water counterpart (DWSRF) appear on track to becoming a reality this year, the annual congressional appropriations process has a much more unpredictable nature, he said in the article. Elsewhere on the water infrastructure issue, leaders of the Senate Environment and Public Works Committee are facing dissent among some state officials and water regulatory stakeholders regarding their legislative attempt to move S 1961, a $35 billion bill to overhaul both the SRF and the DWSRF. A markup scheduled earlier this month was postponed because of those difficulties and another session is tentatively slated for 25 April, E&E reported.