AGC-Supported Private Activity Bond Provision in the Senate’s Tax Bill

Senate Finance Committee Chairman Max Baucus introduced his bill to deal with the Bush era tax cuts, and it included the provision to remove the private activity bond volume cap for water and wastewater projects. Private activity bonds are a form of tax-exempt financing for a governmental entity that wants to partner with a private party to meet a public need.  Removal of water and wastewater projects from the congressionally-mandated cap on their volume would free up private money to act as an additional alternative financing mechanism for water infrastructure construction. This provision, included in President Bush’s final FY09 budget, enjoys bipartisan support in the House and Senate, and has passed the House twice in different pieces of legislation. In the Senate, the provision was most recently included in the stalled Tax Extenders legislation, which has now been folded into Chairman Baucus’s larger tax package of Bush tax cut extensions and other tax provisions. As the tax issue further evolves on Capitol Hill, AGC and its partners in the Sustainable Water Infrastructure Coalition will continue to push for inclusion of the provision in the final package. For more information contact Scott Berry at (703) 837-5321 or berrys@agc.org.