I 

112TH CONGRESS 

1ST SESSION H. R. 1802 

To amend the Internal Revenue Code of 1986 to provide that the volume 

cap for private activity bonds shall not apply to bonds for facilities 

for the furnishing of water and sewage facilities. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 10, 2011 

Mr. PASCRELL (for himself and Mr. DAVIS of Kentucky) introduced the 

following bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

that the volume cap for private activity bonds shall not 

apply to bonds for facilities for the furnishing of water 

and sewage facilities. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Sustainable Water In5 frastructure Investment Act of 2011’’. 

6 SEC. 2. FINDINGS AND PURPOSE. 

7 (a) FINDINGS.—Congress finds the following: 


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1 (1) Our Nation’s water and wastewater systems 

2 are among the best in the world, providing safe 

3 drinking water and sanitation to our citizens. 

4 (2) In addition to protecting the health of our 

5 citizens, community water systems are essential to 

6 our local economies, enabling industries to achieve 

7 growth and productivity that make America strong 

8 and prosperous. 

9 (3) Regulated under title XIV of the Public 

10 Health Service Act (42 U.S.C. 300f et seq.; com11 monly known as the ‘‘Safe Drinking Water Act’’) 

12 and the Federal Water Pollution Control Act (33 

13 U.S.C. 1251 et seq.), community drinking water sys14 tems and wastewater collection and treatment facili15 ties are critical elements in the Nation’s infrastruc16 ture. 

17 (4) Water and wastewater infrastructure is 

18 comprised of a mixture of old and new technology. 

19 In many local communities across the Nation, the 

20 old infrastructure has deteriorated to critical condi21 tions and is very costly to replace. Recent govern22 ment studies have estimated costs of 

23 $500,000,000,000 to $800,000,000,000 over the 

24 next 20 years for maintaining and improving the exVerDate Mar 15 2010 06:05 May 12, 2011 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1802.IH H1802

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1 isting inventory, building new infrastructure, and 

2 meeting new water quality standards. 

3 (5) The historical approach of funding infra4 structure is insufficient to meet the investment 

5 needs of the future. 

6 (6) The Federal partnership with State and 

7 local communities has played a pivotal role in im8 proving the Nation’s water quality and drinking 

9 water supplies. Federal assistance under this part10 nership has been the linchpin of these improvements. 

11 (7) In light of constrained Federal budgets, the 

12 availability of exempt-facility financing represents an 

13 important financing tool to help close the gap be14 tween funds currently being invested and water in15 frastructure needs, preserving the Federal partner16 ship. 

17 (8) Providing alternative financing solutions, 

18 such as tax-exempt securities, encourages investment 

19 in water and wastewater infrastructure that in turn 

20 creates local jobs and protects the health of our citi21 zens. 

22 (9) Federally mandated State volume cap re23 strictions in conjunction with other priorities have 

24 limited the use of tax-exempt securities on water and 

25 wastewater infrastructure investment. 


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1 (10) Removal of State volume caps for water 

2 and wastewater infrastructure will accelerate and in3 crease overall investment in the Nation’s critical 

4 water infrastructure; facilitate increased use of inno5 vative infrastructure delivery methods supporting 

6 sustainable water systems through public-private 

7 partnerships that optimize design, financing, con8 struction, and long-term management, maintenance 

9 and viability; and provide for more effective risk 

10 management of complex water infrastructure 

11 projects by municipal utility and private sector part12 ners. 

13 (b) PURPOSE.—The purpose of this Act is to provide 

14 alternative financing for long-term infrastructure capital 

15 investment programs, and to restore the Nation’s safe 

16 drinking water and wastewater infrastructure capability 

17 and protect the health of our citizens. 

18 SEC. 3. EXEMPT-FACILITY BONDS FOR SEWAGE AND WATER 

19 SUPPLY FACILITIES. 

20 (a) BONDS FOR WATER AND SEWAGE FACILITIES

21 EXEMPT FROM VOLUME CAP ON PRIVATE ACTIVITY

22 BONDS.—Paragraph (3) of section 146(g) of the Internal 

23 Revenue Code of 1986 is amended by inserting ‘‘(4), (5),’’ 

24 after ‘‘(2),’’. 


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1 (b) CONFORMING CHANGE.—Paragraphs (2) and 

2 (3)(B) of section 146(k) of the Internal Revenue Code of 

3 1986 are both amended by striking ‘‘(4), (5), (6),’’ and 

4 inserting ‘‘(6)’’. 

5 (c) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to obligations issued after the date 

7 of the enactment of this Act. 

Æ 


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