AGC-supported Private Activity Bond Legislation Gets Media and Congressional Attention - ACTION NEEDED

[[{"type":"media","view_mode":"media_large","fid":"4554","attributes":{"class":"media-image size-medium wp-image-8354 alignleft","typeof":"foaf:Image","style":"","width":"300","height":"250","alt":""}}]]Rep. Pascrell (right) demonstrates the consequences of deferred water infrastructure maintenance with Sen. Menendez (left) and N.J. State Assemblyman Thomas Giblin (center). The AGC-supported Sustainable Water Infrastructure Investment Act of 2011 was recently introduced in the House and Senate. It would remove water and wastewater from under the private activity bond (PAB) volume cap, making it easier for up to $5 billion to be invested in water infrastructure annually. The bill’s two Democratic sponsors, Rep. Bill Pascrell (D-N.J.) and Sen. Robert Menendez (D-N.J.), were highlighted in an event May 16 in New Jersey at the site of one of the worst water main breaks in the state. AGC worked to ensure AGC of New Jersey was on hand to participate in the event. Also this week, Menendez spoke during a Senate Finance Committee hearing on different methods of infrastructure finance. The Senator questioned Committee witness Fmr. Governor of Pennsylvania Ed Rendell, now with the Building America’s Future Educational Fund, about the ability of private activity bonds to unlock private investment and create jobs and new tax revenue. Private activity bonds or exempt facility bonds are a form of tax-exempt financing that encourages state and municipal governments to collaborate with sources of private capital to meet a public need. Congress provides states an annual allocation of the federal tax-exempt bonds, based upon population.  In 2011, the state allocation or volume cap shall be the greater of $95 per resident or $277.82 million. [[{"type":"media","view_mode":"media_large","fid":"4555","attributes":{"class":"media-image alignright size-medium wp-image-8355","typeof":"foaf:Image","style":"","width":"300","height":"200","alt":""}}]]Left: Rep. Bill Pascrell with AGC of New Jersey chapter executive Tom DiGangi, Jr. Historically, most of the tax-exempt bonds have been issued to politically attractive, short-term projects in the more than 20 other categories eligible for these bonds, such as housing and education loans. The annual volume cap hinders the use of PABs for water and wastewater infrastructure, which are generally multi-year projects and out of sight.  In 2007, only 1.3 percent of all exempt facility bonds were issued to water and wastewater projects. Exceptions from the volume cap are currently provided for other governmentally owned facilities such as airports, ports, housing, high-speed intercity rail and solid waste disposal sites. The legislation could make it easier for between $2 and $5 billion a year in private capital to be invested in water infrastructure, at a cost of just $35.4 million a year. Use AGC’s Legislative Action Center to write your congressman in support of removal of water and wastewater from under the under the private activity bond volume cap. For more information, contact Scott Berry at (703) 837-5321 or berrys@agc.org